Here’s how this Korean group lured investors in $230m crypto fraud

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As a seasoned analyst with years of experience in the financial sector, I find this latest development in South Korea both disheartening and enlightening. The arrest of 215 individuals for operating a fraudulent crypto investment firm is a stark reminder that the digital asset space is not immune to the same scams and schemes that plague traditional finance.

South Korean authorities discovered a fake investment group tricking people into making false cryptocurrency investments.

215 people were apprehended by the Anti-Corruption and Economic Crime Investigation Unit of the Gyeonggi Southern Provincial Police Agency, as stated by Yonhap News, for their involvement in a fraudulent quasi-investment consulting firm.

An organization resembling an investment firm provides loans and stock options, which are repaid according to the company’s success. In simpler terms, this means they invest in companies and receive their return depending on how well those companies perform.

Twelve people, among them an anonymous YouTube personality known as Mr. A, who allegedly has 620,000 subscribers, are now being held in custody due to accusations of fraud, based on the Aggravated Punishment Act for Economic Crimes.

According to the findings of the report, a shady investment organization amassed approximately 230 million US dollars (or around 325.6 billion won) from a total of 15,304 investors. It is alleged that Mr. A and his team orchestrated this fraudulent scheme, involving the sale of 28 different cryptocurrencies, over the period spanning from December 2021 to March 2023.

Among the digital coins, six were made available for trading on foreign platforms via broker services. The rest, valued minimally and not developed by the YouTuber’s corporation, did not come into existence.

According to a report by Yonhap News, many of the investors are middle-aged or older, and some have invested as much as 1.2 billion won, which is equivalent to about $852,000.

It’s said that Mr. A gathered more than nine million phone numbers by utilizing YouTube ads like “Earn 20 times your initial investment,” “An opportunity to alter your fate,” and “Sell your property to obtain a loan for buying coins.

Some of the investors actually sold their apartments to buy the scam crypto tokens.

The deceptive business also attracted investors who had previously experienced financial setbacks with their other investments.

As a crypto investor, I assure you that we’ll make up for any losses you’ve experienced by providing you with promising digital coins. To demonstrate our confidence, my associates and I have decided to sell some of our own cryptocurrency holdings, as reported by Yonhap News.

The dishonest organization went as far as pretending to be the South Korean Financial Supervisory Service, using counterfeit identification documents and phone numbers. They gathered the investor’s IDs under the pretext of “compensating” their losses, which they then used to secure credit loans.

Law enforcement traced the movement of funds across 1,444 accounts which were utilized in the fraudulent sale of counterfeit tokens.

In the end, Mr. A found himself under arrest in Australia following a journey that took him from South Korea to Hong Kong and Singapore. Authorities also seized 22 Bitcoins, valued at approximately $1.9 million based on current prices, from the YouTube personality’s belongings.

In addition, the authorities seized 47.8 billion won — worth nearly $34 million.

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2024-11-13 09:48