[What Do You Think] "Is the Coin Junkie's 'Get-Rich-Quick Mentality' the Problem?" [The Swamp of Bad Coins]

[Report on 316 Victims of Fraudulent Coins] What Do You Think About the Term 'Coinchung'?
Demand for Institutionalization and Strict Punishment of Illegal Acts, Not Loss Compensation
Structural Issues Pointed Out, Including Separate Deposit of Trust Funds
Ultra-Low Interest Rates, Asset Bubble Era
Aggressive Position Investment Inevitable
Blurred Distinction Between 4 Major Exchanges and Miscellaneous Exchanges

[Asia Economy Reporters Chae-eun Koo, Byung-sun Gong] “Isn't the term ‘Coinchung (蟲)’ itself a hopeless label?”

“The problem lies in the ‘one-shot mentality’ of coin gamblers.”

“They get scammed because they enter hoping for a quick fortune. Investors are also at fault.”

These are comments posted on the article series ‘The Swamp of Bad Coins (Report on 316 victims of bad coin scams)’ published by Asia Economy since the 23rd of last month. Shortly after the report, some readers sent emails saying, “Why write articles defending Coinchung?” and “Isn't it enough to just not do what the government forbids?” They pointed out that investing in a risky market with high price volatility and an unestablished system means investors bear significant responsibility for fraud damages.

We felt there is a large gap between such readers’ criticisms and the perspectives of scam victims. We directly asked three victims of bad coin scams who participated in our in-depth interviews what they think about this. Below is a summary of conversations with Mr. A (33), currently pursuing a class-action lawsuit after being scammed by BitSonic withdrawal bans; Mr. B (35), a victim of Jubilee Ace scam; and Mr. C (37), a victim of multi-level marketing scam by V Global.

- Some readers responded that since it’s not stocks but coins, especially altcoins, the responsibility for scam damage lies largely with the investors themselves.

▲A (33): There is a misunderstanding. We are not asking for compensation for the money lost by investing in coins. Why don’t coins have segregated deposits like stocks? Is there no coin deposit settlement institution? That’s why withdrawals are blocked. Is the system designed to make it easy to run away with the money? We are filing a class-action lawsuit and raising public awareness about these issues. But both the government and others misunderstand and attack us as if we are demanding compensation for investment losses. If withdrawal bans happen due to institutional gaps and loopholes, isn’t that a structural problem?

▲B (35): I used to think that way until last year. But when people desperately need money, they get deceived because they are given hope. Banks sell funds, right? But this is even more deceptive. I was told, ‘If you think interest rates are that low, you’re a fool who only knows savings accounts. Are you hiding money under the jangdokdae (traditional Korean earthenware pot) praying to the moon?’ Later I found out it costs about 60,000 won to issue a coin. It was disheartening.

▲C (37): I think this is like asking, ‘Why only buy Samsung Electronics? Why buy junk stocks on KOSDAQ?’ Everyone has different portfolios. Some want to take risks and have aggressive positions. Also, there has been a low-interest, liquidity-driven market with severe asset bubbles. Above all, I want to ask what the ‘big four exchanges’ are and what ‘small exchanges’ are. The exchanges that were famous 3-4 years ago are all gone now. Even the current big four exchanges lack internal controls and operate amid institutional gaps. Under these conditions, I think embezzlement and breach of trust cases can definitely occur.

- What do you think about the hateful term ‘Coinchung’?

▲B (35): The scammers are ‘scamchung,’ so why call the victims ‘Coinchung’? The problem is the scam that deceives people desperate for money. People say buying lottery tickets makes them happy for a week. There is a similar thrill in coins. You can dream about that on a small phone price chart. ‘Maybe I can become rich with coins like those people on YouTube?’ ‘Can I retire in my 40s and achieve financial freedom?’ Is dreaming like that wrong?

▲A (33): I think mainly the older generation thinks and says that. Because it’s an investment method outside their frame of thinking. But there is no such term as ‘stockchung’ or ‘real estatechung.’ I think it’s a transitional phenomenon. Recently, the U.S. Securities and Exchange Commission (SEC) received an application for a Bitcoin Exchange-Traded Fund (ETF) product. It was a monumental event for coin investors. There are people who pursue high risk and high return, and they got scammed due to institutional gaps and lawlessness. So why use a hateful term like ‘chung’?

- How can we prevent bad coin scams?

▲A (33): The Act on Reporting and Using Specified Financial Transaction Information focuses on anti-money laundering, and the government doesn’t even know how many exchanges there are or the estimated damage amount. I think a specialized law related to the industry or virtual assets needs to be passed, but it might take a long time.

▲B (35): The weak punishments are really the problem. Investigations drag on, and in scam victim chat rooms, scammers evolve by pretending to help victims recover damages but end up scamming them again. Because of light punishments and slow investigations, the same crimes keep happening. If this problem isn’t solved, I think it’s almost the ‘end.’

▲C (37): The weakest point is the lenient punishment for economic criminals. I think punishments for pyramid scheme crimes should be stronger. I heard that due to low interest rates, pyramid scheme scams have shifted to virtual currencies, and I am one of the victims. Sites operating pyramid schemes run openly, so people in need of money easily fall for their tricks. I hope supervision and punishments are strengthened.

- Why do you think 20s and 30s increasingly invest in coins rather than stocks?

▲B (35): When I was in middle school, my parents said, ‘You’ll lose money if you invest in stocks.’ But now stocks almost feel like safe assets. Coins have that image for our generation. I think coins are following the footsteps of stocks. People realize small profits and get hooked when prices surge. Nowadays, even elementary school kids issue coins and imitate adults on YouTube. That’s how much times have changed.

▲A (33): I don’t think it’s a matter of age or generation. Many elderly people have also been scammed by bad coins. It’s not an issue limited to a specific age group, and not only 20s and 30s invest in coins. People invest because they want to become wealthy and achieve ‘financial freedom,’ not for ideological reasons. But the media only treats this as a generational issue. It’s tiring. Everyone struggles to make a living, with low interest rates, severe asset bubbles, and liquidity-driven markets, so they see coins as an opportunity.

▲C (37): I’m planning to get married this year. But house prices have nearly tripled compared to two years ago. It’s money impossible to save by working. Among the essentials of life (clothing, food, shelter), ‘shelter’ is the most important, but I can’t afford a house. I live an hour and a half away from work. I can’t buy a house in Seoul. Only asset income and asset investments can approach house prices. High-ranking officials and lawmakers reportedly made billions from real estate price gains. So who can call us Coinchung and throw stones at us?