Former Kronos Technologies engineer sentenced to 1 year and 4 months for manipulating trading program

Kronos, one of the top 10 teams in global cryptocurrency trading volume, was involved in an internal sabotage case in 2020, and has recently received a preliminary court ruling.

Disgruntled over Bonus Issue, Kronos Engineers Sabotage Trading System

According to ETtoday, in 2020, Taiwan cryptocurrency trading company Kronos, failed to pay bonuses as agreed, angering two engineers surnamed Chen and Xu under its umbrella. These two engineers embedded programming errors in the trading and analysis program, causing the company to engage in improper trading operations at incorrect times, resulting in continuous erroneous trading and losses of about $1.4 million USD, exceeding NT$40 million.

The two engineers even expressed "too cool" in their conversation records, believing that the parameters were not changed aggressively enough and were too lenient.

"Zeus" System Tampered With, Company's Investment Strategy Severely Disrupted

Chen and Xu were involved in developing an automated trading system program called "Zeus," which was handed over to Kronos Holdings in the British Virgin Islands for cryptocurrency trading upon completion. The two modified the system's operational mode, causing it to select the worst trading strategy combinations and altered the values used to determine the trend of virtual currency market prices, leading to a series of erroneous buy and sell trades by the company.

Causing NT$40 Million in Losses, Sentenced to One Year and Four Months in Prison

Kronos discovered that the system was consistently causing losses, and further investigation revealed possible tampering by Chen and Xu.

After being sued, the two admitted to some of the offenses but denied tampering with all the programs. The judge found that the two did not faithfully perform their duties but abused their information expertise, resulting in significant losses for the company. They not only embedded over 700 errors in the code but also deleted traces of the crime to make investigation more difficult. They were sentenced for crimes related to computer use, falsifying documents, etc. Chen was sentenced to 1 year and 4 months in prison, with the option to substitute eight months with a fine of NT$240,000; Xu was sentenced to 10 months in prison, with the option to substitute with a fine of NT$300,000. No probation is allowed, and they have the right to appeal.

Not Yet Settled! Kronos Seeks Civil Compensation

Although the two engineers can avoid prison by paying fines, as reported by ETtoday, Kronos' civil compensation lawsuit is still ongoing and is currently being handled by the Taipei District Court.