South Korean police have taken action against a company that was allegedly involved in a cryptocurrency scam, leading to the arrest of 25 individuals. The firm is accused of deceiving approximately 4,000 people and profiting nearly $14 million in both fiat and crypto currencies. The suspects have been detained on charges of fraud.
The Suspected Scam and the People Involved
The company, based in the city of Daegu, reportedly operated between August 2020 and June 2021. Their scheme involved promoting a coin through a multi-level sales company network and social media platforms. Alongside a cryptocurrency developer, one of the main culprits apprehended was the head of the said sales company.
Victims were supposedly enticed into investing in the unnamed coin, with promises of significant gains upon its listing on a domestic cryptocurrency exchange. While the coin itself appears to have had a legitimate existence, it is believed that the claims made about its potential returns were false. Shortly after being listed, the coin was delisted, causing suspicion and prompting an official investigation.
The company allegedly used partnerships with large corporations as a bait to attract unsuspecting investors. Their tactics involved market manipulation to increase their profits while causing significant losses to investors. The investigation has already confiscated more than $7.3 million of the group’s funds.
National Impact and Ongoing Investigation
The firm’s activities are reported to have affected investors across the country. The National Police Agency and the Daegu Police Force’s Cyber Investigation Unit are leading the investigation, which is still in progress. As part of their efforts, they have charged a 48-year-old crypto exchange executive for aiding and abetting fraud.
“Last month, a convicted crypto fraudster was handed a seven-year jail term, while in May, police investigations resulted in the arrest of a suspected scammer who targetted ‘housewives and office workers.'” – Police Spokesperson
