Another Massive Crypto Scam Exposed: 215 Arrested In $232M Crypto Fraud

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As a seasoned analyst with over two decades of experience in the financial industry, I have witnessed the rise and fall of numerous investment schemes, some legitimate, others not so much. The recent crypto scam in South Korea is a stark reminder of how desperate individuals can become victims of such fraudulent activities, especially when lured by promises of high returns.

Due to the growing interest and potential profitability of cryptocurrency investments, there’s been a significant surge in crypto-related fraud cases. This is largely due to individuals seeking quick methods to amass substantial wealth. Unfortunately, rather than earning profits, they often fall prey to these crypto scams that offer misleading guarantees of high returns. A notable example of this is the scam uncovered in South Korea, where a con artist successfully swindled around $232M from thousands of financially distressed middle-aged people.

South Korean Police Busted 215 People In Major Crypto Scam

In a significant crackdown, the Anti-Corruption and Economic Crime Investigation Unit of the Gyeonggi Southern Provincial Police Agency apprehended 215 individuals for orchestrating a cryptocurrency fraud that has impacted over 15,000 people. Remarkably, within the past few days, the police also dismantled a crypto scam worth approximately $1.6 million in the Bitcoin mining industry.

According to local reports, authorities have dismantled an investment consulting scheme operated by a well-known YouTuber who had over 620,000 subscribers. This fraudulent business had been active for nearly two and a half years, from December 2021 until March 2, 2023. Over a dozen individuals, including the main suspect, Mr. A, have been arrested and charged under the Aggravated Punishment Act for Economic Crimes. They are currently in custody.

The Police investigation revealed that the YouTuber has been running multiple pseudo-investment consulting firms and organizations. Collectively they ran money laundering, price manipulation, and other related activities to embezzle investors’ money. The team had lured in middle-aged commoners with their YouTube advertisements,  claiming as high as 20x profits.

Among the frequent phrases they employed were “an opportunity to rewrite your fate” and “liquidate your apartment and borrow funds to acquire coins.” Utilizing these arguments, this cryptocurrency fraud amassed approximately $232 million from 15,304 individuals. Regrettably, some victims actually sold their homes as a result of these deceitful practices, making it one of the largest crypto scams on record.

Scammer Promoted 28 Fake & Low Volume Tokens

Scammers involved in cryptocurrency deceit convinced individuals to invest in a total of 28 different digital tokens. Out of these, six were created by themselves, while the rest were tokens with minimal trading volume. By buying substantial amounts of these tokens, they artificially inflated their prices, leading people to think that these tokens were high-performing and would generate significant profits. This was all part of a scheme to deceive investors.

Tokens with a small market value and high risk of loss were still prevalent in the market. Unfortunately, these investments often led to financial losses. Yet, the scammers didn’t cease their activities after stealing funds. Following the losses, they would reach out to investors, promising to reimburse them if they provided their security numbers. With this information, they would fraudulently take loans using the investors’ profiles, turning simple crypto fraud into a more complex scheme involving identity theft and loan abuse.

Culprit Arrested Despite His Running Attempt

It’s been determined that during the police investigation, both YouTube and Mr. A were involved in a cryptocurrency scam. This fraud was designed to compensate for stock refund requests that were halted in 2020. As a result of this scam, they managed to amass approximately $234 million and hold 22 Bitcoins. Today, with the current Bitcoin price at around $87,600 per coin, these Bitcoins are worth about $1.9 million.

The suspect had already escaped and found refuge in Australia, but they were apprehended on November 13.

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2024-11-13 18:16