South Korean authorities have smashed a fraudulent cryptocurrency ring, recouping an equivalent of $213 million. According to the report, the fraudulent crypto ring scammed about 15,000 individuals during its operation.

The latest event marks the highest-ever investment scam tied to digital assets in the country. According to the Gyeonggi Southern Provincial Police Agency, the act was orchestrated by a popular YouTuber in the country.

South Korean police nab the orchestrator of the crime

According to the police report, the YouTuber had more than 62,000 subscribers, making him very influential. The criminal set up a large base of operation, setting up investments consisting of consulting firms and sales corporations. The organization also had diverse arms carrying out different activities ranging from price manipulation to money laundering to coin issuance.

The operation took flight in December 2021 after the ringleader, Mr A, shifted from stock trading to cryptocurrency. Reports claimed he had failed in several stock trades in 2020, before the shift to crypto.

The ring employed aggressive marketing tactics, calling more than 9 million users to convince them about the investment. The group cajoled investors by telling them to invest in the once-in-a-lifetime opportunity while also telling them to take loans to purchase the tokens.

The criminal entity created 28 different tokens, issuing six tokens itself and listing them on exchanges abroad. The tokens were put through several price manipulations before they were used to entice investors. Although the other 22 tokens were not created by the ring, the tokens did not perform well due to their low trading volumes and limited availability of information in South Korea.

The scheme targeted victims who have lost funds from crypto or stocks in the past, telling them it is an opportunity to get back all they have lost. The gang also impersonated Financial Supervisory officials, using fake items like names and cards to gain their users’ trust. With the access, they used the victim’s personal information to secure credit loans.

Most of the victims were elderly, with the group cajoling them into investing with an equivalent of $786,000. Some victims also had to sell their residences to invest in the fraudulent scheme.

Police investigation uncovers 215 individuals linked to the crime

Police began investigating the case following a complaint from local police in February 2023. The police analyzed 1,444 accounts, tracing the flow of funds to the end account. The ring leader, who fled South Korea at the time, was apprehended in Australia with the authorities seizing 22 Bitcoins from him.

Law enforcement has urged the court to approve its pre-indictment confiscation and preservation of recovery for $31.3 million identified during its tracking. The investigation also led to the arrest of 215 individuals, arresting 12 members including the ring leader.

The suspects will be charged under the Aggravated Punishment Act for economic crimes. The prosecutor will also include other charges related to organizing, joining, or participating in a criminal organization. The case also represents a major win for South Korean authorities in their push to eradicate crypto fraud.

A state police official noted the rampant nature of investment scams, noting that the perpetrators are now becoming intelligent. He warned the general public to be wary of high-yield investment schemes without seeing the parties involved as most of them are fake.

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