Honest Answers to "Coin Victims Deserve It"

Investors' 'Greed' Cited as Cause of Fraud Losses
But Fraudsters Exploit Victims' Poor Conditions
Perpetrators Promise Principal Refunds to Re-exploit Victims

[Asia Economy Reporter Gong Byung-sun] “I know the public will criticize me, saying I deserved it because I was greedy.” A (45 years old), a victim of the Jubilee Ace cryptocurrency scam, said this while explaining the damage situation. Although the victims’ ‘greed’ is pointed out as one of the factors leading to cryptocurrency scams, it was not mostly their fault. The responsibility of the scammers who exploited the victims’ circumstances amid the economic difficulties caused by COVID-19 was the greatest.

According to a survey by Asia Economy, among 316 cryptocurrency scam victims, 66.8% (211 people) answered that their income decreased due to COVID-19. People who fell into situations where it was difficult to earn regular income due to COVID-19 were easily exposed to cryptocurrency scams. Mr. A said, “I was working in the food service industry but lost my job due to COVID-19,” and added, “When I needed regular income, Jubilee Ace promised dividends if I invested in a cryptocurrency called Aquanite.”

Many were scammed while looking into cryptocurrency investments due to an uncertain future. In fact, the average age of survey respondents was about 43, which is older than the 20s and 30s who led the cryptocurrency craze. Respondents aged 40 and above cited retirement as the reason for investing in cryptocurrency. Mr. B (63 years old), a victim of the G-Pay scam, said, “I encountered cryptocurrency while looking for retirement preparations after retirement,” and added, “Since it was during the peak of the cryptocurrency boom, I invested my retirement funds without suspicion.”

A misunderstanding or illusion about blockchain also played a role in the scams. The name cryptocurrency or blockchain made it seem like a high-value business. Scammers usually emphasized the personal abilities of the individuals running the business or the possibility of the currency being used as money rather than the blockchain technology itself when introducing cryptocurrencies. Professor Hong Ki-hoon of Hongik University’s Department of Business Administration explained, “Blockchain is a technology whose uses have been verified for 20 years,” and added, “The mystique that it can be used in all fields beyond ledger recording creates bubbles, and those bubbles easily lead to scams.”

Victims who were economically struggling and ignorant about blockchain became easy prey for scammers. The scammers approached closely enough to make it difficult to break off the relationship and induced investments. Mr. A said he trusted Kim, the recruiter of Jubilee Ace who extorted a total of 130 million KRW, more than his own family. In his difficult situation, Kim always took care of him and encouraged him, so he thought Kim was a good person. Mr. A lamented, “We met so often that we could be called lovers and shared many worries,” and added, “I believed and invested thinking we would be together for life, but I never expected to be betrayed.”

They also exploited such relationships to further exploit victims. When Mr. A was devastated after being scammed out of 80 million KRW by Jubilee Ace, recruiter Kim appeared again. Kim promised that if Mr. A invested in a new cryptocurrency exchange, he would recover the lost principal. Although Mr. A did not fully trust Kim’s words, he invested another large sum of 50 million KRW because he was in urgent need of money. Mr. A said, “I had lost my reason at that time,” and added, “Now, it’s not just about losing money; it’s mentally exhausting to the point where I can’t even trust people.”