South Korean Police Bust $350 Million Crypto Scams Targeting Hundreds of Victims

According to cryptonews report, South Korean authorities have taken action against two alleged cryptocurrency scams, estimating the total value of the scams at $350 million. It is believed that hundreds of individuals have fallen victim to these fraudulent schemes.

One of the cases involved a marketplace for “virtual fashion items” and is reported to have deceived at least 435 victims, resulting in a staggering loss of $333 million. The CEO and Vice President of the marketplace were indicted on charges related to fraud by the Suwon District Prosecutor’s Office on May 30.

According to the prosecution officials, the individuals operated an online peer-to-peer (P2P) site between November 2020 and September 2021. They enticed investors by promising returns of 3-16% on their stakes if they kept their funds on the platform for 1-5 days. To further deceive investors, the operators created fictitious listings for virtual fashion items, including virtual dresses and traditional Korean and Japanese attire like hanbok and kimono pieces.

The operators employed a multi-level “pyramid system” to attract new members to the marketplace. Investors were organized into eight levels, with those at the highest level promised a daily return of 16%. Additionally, the operators claimed to have developed a cryptocurrency asset that would increase in value the longer investors held onto it.

Prosecutors have revealed that they are also investigating ten other individuals associated with the platform.

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