South Korean police have successfully taken action against a group of suspected “international” crypto fraudsters. In a recent operation, over $12 million was frozen, and 49 individuals were arrested. The Cyber Investigation Department of the Seoul Metropolitan Police Agency led the investigation, targeting six separate organizations and apprehending their suspected leaders. The charges brought against the group include fraud, with the police specifically identifying their involvement in operating a fraudulent cryptocurrency investment site.
The Operation and Activities of the Fraudulent Group
Authorities discovered that the fraudulent site primarily targeted overseas investors, including those from the Philippines. The group is believed to have been active from September 2020 to April of the following year, during which they managed to defraud at least 253 victims, amassing over $11.5 million. The police suspect that the group obtained personal data leaked on the internet to identify potential victims. It has been revealed that the fraudsters had access to a staggering 1.62 million pieces of illegally acquired personal information, emphasizing the level of sophistication involved in their operations.
In their quest to attract potential investors, the fraudsters resorted to randomly distributing promotional messages within public cryptocurrency-related chat app groups. This strategy aimed to entice unsuspecting individuals to visit their fake investment site. Earlier this week, a raid in the city of Daegu resulted in the arrest of another 25 individuals who had similarly targeted victims through chat app groups.
South Korean police have released images illustrating the substantial amount of money confiscated from this alleged crypto fraud ring, demonstrating the scale of their illicit gains.
The Elaborate Scheme and Tactics Used
According to the police, this fraudulent operation was highly sophisticated and involved multiple specialized teams within each of the six organizations. Some members posed as successful investors, engaging in chat rooms to showcase the substantial profits they claimed to have earned from the fraudulent investment site.
Other individuals presented themselves as employees of a fake cryptocurrency exchange. They enticed potential victims by guaranteeing significant returns on their investments. To establish trust, the fraudsters provided small initial returns of x1.5 on the victims’ investments. This initial success led victims to believe in the legitimacy of the platform.
Subsequently, the bogus exchange promised even higher profits of x3 to x5 for larger investments. However, once victims followed instructions and made further deposits, they encountered obstacles to withdraw their funds. The fraudsters demanded additional deposits or payments for “taxes and fees” before allowing withdrawals.
If victims expressed grievances, they would be contacted by another team claiming that they were subjects of an investigation by the regulatory Financial Supervisory Service. Eventually, victims were expelled from the chat rooms and left with no access to the bogus exchange.
Earlier this year, the CEO of V Global was sentenced to 25 years in prison for similar fraudulent activities, and several other executives also received long-term jail sentences.
The police spokesperson warned:
“Investors should exercise caution when engaging in cryptocurrency transactions and thoroughly research the legitimacy of investment platforms. Be wary of any promises of unusually high returns, and never disclose personal information without verifying the credibility of the recipient.”
