South Korean CEO Arrested for ‘$366 Million Crypto-themed Fraud’

Ethereum South Korea

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Tim Alper

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Tim Alper

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Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

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August 12, 2024 19:30 EDT

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The South Korean CEO of a tech firm has been arrested for allegedly masterminding an Ethereum (ETH) -themed crypto-powered fraud scheme that sucked in around 500 victims.

Per iNews24, a man surnamed Byun, named as the CEO of a company named Wacon, has been remanded in custody and will face trial.

South Korean CEO Duped 500+ Investors, Prosecutors Claim

Byun was arrested alongside another suspected “accomplice” surnamed Yeom. Previous South Korean media reports from outlets such as Cheonji Ilbo have named the CEO as Byun Young-oh.

The Fifth Criminal Division of the Seoul Central District Prosecutors’ Office said it would try Byun and Yeom “on charges of fraud.”

Prosecutors said that most of the “victims” were elderly citizens. And they said Byun orchestrated a Ponzi-style pyramid.

Wacon operated a wallet service named MainEthernet, where it claimed investors’ funds were held.

However, in the summer of 2023, reports began circulating online claiming investors were unable to withdraw their funds from the platform.

Reporters noted in November 2023 that a sign had been removed from the front of the headquarters MainEthernet. The offices are located in the affluent Gangnam District of Seoul.

Byun met with investors in November last year, where he claimed that he would refund investors. He also told them that he could “solve everything in just four months.”

However, prosecution officials believe Byun led “a multi-level marketing fraud” scheme “worth hundreds of billions of won.”

Officials say Byun and Yeom “attracted investors” by “promising to pay interest” if they “deposited” crypto in the firm’s wallets.

Prosecution spokespeople said they were “currently investigating” to establish whether any “additional victims or accomplices” may be involved.

At one point, Cheonji Shinmun also reported, Byun allegedly promised investors they could expect to make profits of “45% to 50%” on their stakes.

Byun reportedly refuted accusations that he was running a Ponzi scheme late last year, when he claimed:

“I don’t even know what a Ponzi is. […] And I don’t know how multi-level marketing schemes are structured.”

Most Investors Aged 60 or Above – Media Reports

Byun reportedly claimed that he also operated a crypto exchange and an NFT-based gaming business.

Previous reports claimed that some 12,000 people may have invested their money in Wacon. They also noted that the majority of investors were aged 60 or above.

In May, scammers targeted ETH investors in South Korea, claiming that their tokens would be “burned” if they did not take action.