South Korea Cracks Down on $14M Multi-Level Crypto Scam

• South Korea’s police agency has busted a multimillion-dollar crypto fraud syndicate.
• The police made multiple arrests.
• Investigations into other suspects are ongoing.

South Korea’s Daegu Police Agency has made multiple arrests and shut down a multi-level crypto fraud syndicate believed to have swindled victims into investing millions of dollars on the pretext of “high profits” guarantees.

The suspects allegedly created a dubious cryptocurrency through SNS reading rooms and multi-level companies between August 2020 and June 2021 before targeting over 4,000 victims with the scheme.

On November 6, the police rounded up on the suspects and shut down their operations.

Police Arrest 25 and Shut Down Operations

As reported by local media outlets, investigations led the police to a manhunt and the subsequent arrest of 25 individuals who are suspected to be at the epicenter of a long-running $14 million crypto fraud scheme.

The arrested individuals included a 47-year-old Chief Executive Officer (CEO) of a crypto issuance firm and a top-ranking officer of a multi-level company caught in the middle of the scheme.

According to the police, the suspects leveraged partnerships with large corporations as bait to woo victims into investing in crypto through a domestic crypto exchange. After amassing a stupendous fortune, the suspects allegedly delisted the exchange.

The police also allege that the suspects were involved in a long-running price manipulation scheme at the exchange.

Before the arrests, police partially recovered victims’ funds and vowed to intensify investigations.

Partial Recovery and Further Investigations

The police agency noted that it had recovered 9.5 billion won (approximately $7.2 million) before indicting the 25 suspects.

Following the arrests, the police will be expanding their investigations to unravel other crimes commissioned during the listing and delisting of the involved domestic crypto exchange. This probe will center around the exchange’s executive, and the police anticipate it will culminate in a prosecution on charges of quasi-receipt and aiding and abetting fraud.

Stay updated on the growth of South Korea’s crypto market cap:
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Stay updated on how much South Korean taxpayers hold in crypto:
South Korean Taxpayers Declare $99B in Overseas Crypto Assets