[Asia Economy Reporter Lee Jung-yoon] Financial authorities have issued a special warning about illegal companies claiming that investing in platforms and non-fungible tokens (NFTs) featuring famous celebrities can yield high returns.
According to the Financial Supervisory Service on the 9th, recently Group A promoted that investing 550,000 KRW per share would pay 17,000 KRW daily, resulting in a monthly return of 100%, and recruited investors. To gain the trust of the general public, they used TV commercials featuring famous celebrities, large outdoor billboards near Gangnam Station in Seoul, and nationwide business briefings to induce investments.
Furthermore, despite the lack of clear verification of the business structure and profitability, they promoted their own platform or advertising rights (NFT) investments as a new business capable of high returns, thereby misleading investors.
The Financial Supervisory Service emphasized that although Group A separately pays sales commissions and provides differential commissions based on investment amounts to induce large investments, if there is no profitability, it could be a Ponzi scheme relying on new investment funds. They explained that Group A’s fundraising methods are very similar to those of past illegal quasi-deposit companies, so financial consumers need to be cautious.
Previously, a virtual asset exchange from August 2020 to mid-2021 promoted guaranteed principal and 300% fixed returns on investments in its own developed coin, recruiting investors by paying high referral commissions and defrauded about 2 trillion KRW. Also, Group B, from 2003 to 2005, promoted famous celebrities as company advisors and recruited investors through a multi-level marketing method where commissions were paid only if lower-tier operators sold many products, defrauding about 4.5 trillion KRW.
The Financial Supervisory Service urged consumers to be cautious and follow these guidelines: ▲ suspect quasi-deposit or fraud when funds are raised promising high returns ▲ be especially careful if funds are raised through multi-level marketing methods ▲ always verify whether the entity is a regulated financial institution before investing ▲ report suspected quasi-deposit activities promptly to the police or the Financial Supervisory Service.
A Financial Supervisory Service official stated, "It is necessary to remember that high-return investments carry a very high risk of illegal fundraising and principal loss," and added, "We will continue to actively cooperate with investigative authorities to strongly respond to illegal companies such as quasi-deposit schemes that infringe on people’s livelihoods."
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