Korean News Outlet Chosun Ilbo Accused of Promoting KOK Crypto Scam

South Korea

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Jimmy Aki

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Jimmy Aki

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Jimmy has nearly 10 years of experience as a journalist and writer in the blockchain industry. He has worked with well-known publications such as Bitcoin Magazine, CCN, and Blockonomi, covering news...

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October 8, 2024

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Chosun Ilbo, South Korea’s largest newspaper, is under fire for allegedly promoting the KOK cryptocurrency scheme, a fraudulent operation that caused $2.97 billion in losses, as reported by Aju Press on Tuesday.

A coalition of victims claims that Chosun Ilbo and its subsidiaries—IT Chosun and Digital Chosun Ilbo—misled the public by presenting the KOK token as a legitimate investment opportunity.

Chosun Ilbo’s Alleged Role in KOK Crypto Scam

Victims of the KOK scam argued that the media outlets provided extensive, favorable coverage, lending credibility to the token.

Reports highlighted the launch of KOK’s main transaction server and mentioned consumer satisfaction awards, bolstering the scheme’s image.

According to coalition leader Jin Eun-ja, these media endorsements likely extended the life of the scam, leading to massive financial losses for unsuspecting investors.

Attorney Lee Min-suk, representing the victims, emphasized that the timing of Chosun Ilbo’s coverage raises suspicions.

He suggested that the newspaper’s support might have helped the key figures behind the crypto scam avoid legal repercussions in its early stages.

As the fallout from the KOK scam continued, both victims and lawmakers began pressing for greater accountability.

The Ulsan District Prosecutor’s Office is conducting ongoing investigations, though no notable results have emerged yet.

Jin Eun-ja also noted that a key figure behind the KOK scam remains at large in the U.S., despite being a wanted fugitive.

He was arrested earlier this year and is currently awaiting extradition to South Korea, where he will face charges related to his role in the fraudulent scheme.

Responses and Actions by Lawmakers and Regulators

The KOK scandal has attracted the attention of South Korean lawmakers.

During a National Assembly audit on October 7, Democratic Party representatives Yang Moon-suk and Min Hyung-bae called for a comprehensive investigation into the scheme.

They claimed that the KOK operation functioned as a multi-level marketing scheme, drawing in approximately 1.86 million investors and causing damages estimated at 4 trillion won (around $2.97 billion).

At its peak, the KOK token reached a value of $6.83 in February 2022, but it has since plummeted to $0.0003129.

Despite this collapse, the token is still being traded on four crypto exchanges: ByBit, Gate.io, Indodax, and HTX, with ByBit alone recording a 24-hour trading volume of $73,114 recently.

The KOK project seems largely abandoned by its operators, with their last social media activity occurring in June 2023.

This absence of communication has fueled investor concerns about the future of their investments.

Broader Regulatory Context

In related developments, South Korean regulators are closely monitoring the case of Do Kwon, the controversial founder of Terraform Labs.

Kwon is facing separate allegations connected to a $40 billion cryptocurrency fraud involving the collapse of TerraUSD. This case has intensified regulatory scrutiny in both South Korea and the United States.

In June, Terraform Labs and Do Kwon reached a $4.47 billion settlement with the U.S. Securities and Exchange Commission (SEC), which initiated the process of winding down its operations.