Key Takeaways
- South Korea arrests 200+ individuals, including a YouTuber, for a $232 million crypto scam.
- Fraudsters targeted 15,000+ victims by promoting 28 virtual assets, manipulating prices.
- Police warn of sophisticated crypto scams and urge caution with high-return investment offers.
South Korean authorities have arrested over 200 individuals, including a popular YouTube personality with over 600,000 subscribers, in connection with a massive cryptocurrency scam involving millions of dollars. The arrests follow an extensive investigation into the fraudulent operation, where the YouTube influencer is accused of playing a central role in orchestrating the scheme.
Cryptocurrency has rapidly gained popularity as a digital asset, attracting both legitimate investors and fraudsters looking to exploit its unregulated nature. And sometimes, even influencers seem to be involved; for instance, in 2021, esports organization FaZe Clan suspended three members of its team and completely removed a fourth following allegations of fraud tied to a cryptocurrency “charity token.”
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Adding to the growing list of crypto-related crimes, South Korean law enforcement recently dismantled a massive investment fraud involving virtual assets, leading to the arrest of 215 individuals connected to the scheme. According to Yonhap, the operation, which targeted over 15,000 victims, was orchestrated by a popular YouTube influencer with 620,000 subscribers, identified only as Mr. A, along with 11 other key suspects. The group allegedly swindled over 325.6 billion won (approximately $232 million) from victims by promoting 28 different types of virtual assets. The arrests were announced by the Southern Provincial Police Agency’s Anti-Corruption and Economic Crime Investigation on November 13.
South Korean Police Uncovers Massive Cryptocurrency Scam
Among the 28 virtual assets sold, six were self-issued by Mr. A and his associates and listed on foreign exchanges, where they manipulated the prices before selling them to investors. The remaining 22 virtual assets, while not self-issued, were low in value and lacked substantial market presence. The fraudsters also targeted victims who had previously lost money in other investments, claiming that they could recoup their losses by purchasing the newly promoted coins.
The investigation began after a case was filed in February of last year, prompting the police to analyze over 1,400 accounts linked to the fraudulent operation. Mr. A, who had fled to Australia via Hong Kong and Singapore, was eventually apprehended, and 22 Bitcoins were seized from his possession. Additionally, the authorities have filed for the pre-indictment confiscation and preservation of 47.8 billion won (approximately $34.2 million) in illicit proceeds. A police spokesperson noted the growing sophistication and organization of such cryptocurrency scams and urged the public to exercise caution when approached with high-return investment offers, particularly those made online.
In a related incident, reports surfaced recently of a Canadian cryptocurrency firm WonderFi’s CEO being kidnapped in Toronto and held for a $1 million ransom. The ransom was paid electronically, and the individual was safely recovered shortly thereafter.