Police arrest 215 people for cryptocurrency fraud
South Korean police dismantled a scheme that caused losses of more than US$232 million with cryptocurrencies. According to the announcement, the scam reached thousands of people before the police dismantled the scheme.
Scammers mainly targeted middle-aged people, considered more vulnerable, as well as individuals looking for shortcuts to make large profits. However, instead of making profits, victims handed their life savings into the hands of criminals.
South Korean police arrested 215 people involved
The Gyeonggi South Provincial Police Agency's Anti-Corruption and Economic Crimes Investigation Unit arrested 215 people for running a cryptocurrency fraud that affected more than 15,000 people.
Similarly, police also busted another cryptocurrency scam involving Bitcoin mining. In this case, the scheme caused losses of US$1.6 million by promising false returns with cryptocurrencies.
The Gyeonggi team took down a fake investment advisory company run by a South Korean YouTuber that had more than 620,000 subscribers. This ran for a period of almost two and a half years, between December 2021 and March 2, 2023.
More than 12 people have been charged under the Aggravated Punishment for Specific Economic Crimes Act and are being detained. Among them is the project leader, identified as “Mr. THE”.
The police investigation revealed that the YouTuber was managing several companies and investment advisory organizations, all of which were fake. In fact, the scheme was a front for criminal money laundering, price manipulation and other activities.
The group used bold slogans such as “A chance to change your destiny” or even “Sell your apartment and take out a loan to buy coins”. They also lured their victims through advertisements on YouTube offering profits of up to 20 times.
In total, the scheme raised more than US$232 million and harmed around 15,000 people. Of these, some even sold personal assets to take advantage of the false returns promised by the scammers.
Scammer promoted 28 fake cryptocurrencies
During the time the scheme ran, the criminals released 28 fake tokens. Among them, 22 had very low volume – only the scheme operators carried out the transactions.
Scammers were artificially inflating cryptocurrency token prices by purchasing large quantities, which gave the impression that demand was high. This tactic deceived investors who thought they were faced with buying opportunities.
The remaining six low market cap tokens had high risks and often traded lower. When this happened, scammers used to call investors and ask for more contributions in exchange for higher interest rates.
The police investigation also clarified that Mr. A was carrying out cryptocurrency fraud to compensate members' refund request for actions that were stopped in 2020. However, from the cryptocurrency scam, he made $234 million.
The leader of the scheme also had around 22 Bitcoins (BTC) as his personal fortune. Considering the price of BTC at $87,600, this portfolio had around $1.9 million.