Massive Crypto Scam Uncovered: South Korea Police Arrest 215 Individuals

South Korean police have made a significant breakthrough in the fight against cryptocurrency fraud, arresting 215 individuals linked to a massive scam that defrauded investors of approximately $228 million. The operation, which targeted over 15,000 victims, involved the sale of worthless virtual tokens and was orchestrated by a group that included a popular YouTuber.

Key Takeaways

• 215 individuals arrested in connection with a $228 million cryptocurrency scam.
• The scheme involved the sale of 28 different virtual tokens, with six being self-issued.
• Victims were promised high returns, leading many to sell assets or take loans to invest.
• The operation was run by a YouTuber with 620,000 subscribers, who initially fled the country.

Overview Of The Scam

The Gyeonggi Nambu Provincial Police announced the arrests on November 13, 2024, revealing that the scam had been running since late 2021. The group allegedly promised investors returns as high as 20 times their initial investment, luring primarily middle-aged and elderly individuals into the scheme. Many victims were encouraged to sell their homes or take out loans to fund their investments in the fraudulent tokens.

The Structure Of The Operation

The criminal organization was sophisticated, operating through multiple fronts:

• Investment Consulting Firms: The group established several fake investment companies to promote their tokens.
• YouTube Marketing: They utilized a YouTube channel to attract potential investors, leveraging the popularity of the platform to gain trust.
• Token Issuance: Out of the 28 tokens sold, six were created by the group and listed on international exchanges, while the others had minimal trading volumes and were deemed worthless.

Arrests And Legal Actions

Among those arrested was the alleged mastermind of the operation, who had initially fled to Australia. The police have detained 12 key members, including the YouTuber, who was instrumental in promoting the scam. Authorities have also seized assets, including Bitcoin, and are pursuing further legal action against the suspects under the Aggravated Punishment Act for Specific Economic Crimes.

Impact On Victims

The scam has had a devastating impact on its victims, many of whom were misled into believing they were making sound investments. Some individuals invested as much as 1.2 billion won (approximately $786,000), with reports of victims selling their primary residences to participate in the scheme. The police have warned the public about the dangers of high-return promises, especially those made through non-face-to-face interactions.

Conclusion

This case marks one of the largest cryptocurrency scams in South Korea's history, highlighting the growing sophistication of such fraudulent schemes. As authorities continue to crack down on crypto-related fraud, the incident serves as a stark reminder for investors to exercise caution and conduct thorough research before engaging in cryptocurrency investments.

Sources

• South Korea police arrest 215 in suspected $228 mln crypto scam | Reuters, Reuters.
• South Korean Police Arrest 215 in Suspected $232M Crypto Investment Scam Investigation: Yonhap, CoinDesk.
• South Korean police bust $228m crypto scam, 215 arrested, Tech in Asia.
• South Korea Arrests 215 People in $222M Crypto Investment Scam, Coinpedia.
• South Korean police capture organization linked to $213 million crypto scam | Cryptopolitan, Cryptopolitan.