South Korean Police Arrest 30 in $8m ‘Crypto Scam’ Bust

Police Scam 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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June 26, 2023 06:55 EDT

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South Korean police have arrested 30 people as part of an investigation into a suspected $ 8 million crypto scam. Masterminds appear to have promised investors “guaranteed gains” of up to 2,000%.

Munhwa Ilbo reported that Seoul Metropolitan Police estimate the “gang” managed to dupe almost 160 victims out of a combined $8 million. Police think the gang may have issued a coin and may be members of the token’s governing foundation. The group then reportedly used sophisticated tactics to manipulate token prices after it was listed by a major domestic exchange.

The capital’s Financial Crimes Investigation Unit stated it had handed all 30 individuals over to prosecutors.

The unit said the operation centered around “crypto reading room” channels on the chat app Telegram. The gang, police said, attempted to influence prices on an unnamed, listed coin from September to November 2021.

South Korean Police: ‘Crypto Scam’ Operators Promised ‘500%-2,000% Gains’

The gang convinced victims to pool their money so that the gang could make a large coin purchase – in a bid to drive up prices. But when prices rose, the gang reportedly sold the coins for a large profit – and did not hand over any of the money to their victims.

Police said that the gang had told victims they could expect to receive “up to 500%-2,000%” returns on their investments.

Officers said they had frozen a number of crypto exchange wallets and confiscated almost $1 million worth of funds.

The media outlet added that the police have also revealed plans to create a “consultative body” with crypto exchanges. Such a body, officers believe, will allow them to start investigations faster in suspected crypto price manipulation cases.

Earlier this month, the CEO of a fake South Korean crypto bank was given a 10-year jail term after a court found him guilty of defrauding investors out of some $181 million.