[Exclusive] "Refund on Utility Bill Coin Payments" 850 Billion Fraud Gang Referred to Prosecution

A group that illegally collected 855 billion KRW in investment funds from about 8,000 people by promising to return a portion when paying utility bills with virtual currency (coins) issued by their company has been handed over to the prosecution.

Photo by Yonhap News

On the 23rd, according to a comprehensive report by Asia Economy, the Seoul Guro Police Station sent 10 executives and employees of the virtual currency electronic payment company OnNetworks to the prosecution on the 21st on charges of fraud and violation of the Act on the Regulation of Conducting Fund-Raising Business without Permission, etc. Among them, 2 were detained, and 8 were handed over without detention.

OnNetworks, located in Guro-gu, Seoul, is known to have launched an electronic payment service using virtual currency and recruited members from October 2021 to February last year.

The company first launched a service where members could charge the company's points with cash. Then, members were induced to use points to purchase virtual currencies such as OmnisGold created by the company. The company is accused of deceiving victims by saying, "If a member requests payment agency for utility bills such as electricity bills or communication fees, we will pay on their behalf and deduct it from points and virtual currency," and "We will return 4-9% of the utility bill payment amount to members as points." The company also used a "multi-level marketing method" where if a member brought another member, the referrer would receive 1% of the subsequent member's payment amount.

Afterwards, victims demanded their money back, but the company did not refund them. The police received complaints from 105 victims in 2021 and investigated. As a result of the investigation, the scale of damage snowballed, and the police currently estimate the damage amount to be 855 billion KRW, with about 8,000 victims.

The police stated that the suspects admitted all charges during the investigation.

The police said, "We have taken seizure and preservation measures for about 2.3 billion KRW and guided the victims to apply for compensation orders."