The National Investigation Headquarters of the Korean National Police Agency announced on the 24th that it will conduct a special crackdown on illegal activities in investment leading chat rooms for six months from the 25th until March 24 of next year.
Investment leading chat rooms are spaces where individuals recommend stocks or inform the timing of trades to individual investors through phone calls, social networking services (SNS), investment briefings (online and offline), and provide investment-related solicitations, advice, or instructions. They typically start by approaching individuals with promises of principal guarantees and high returns, encouraging them to join open chat rooms. Afterwards, through accomplices, they provide false information or show fake home trading system screens created by the perpetrators, deceiving victims into believing and investing, thereby embezzling money. Although it appears that hundreds of people are in the open chat rooms, in reality, only a few perpetrators use fake IDs to create the illusion of many participants.
Earlier this year, the National Investigation Headquarters of the Korean National Police Agency recognized the damage caused by illegal activities in investment leading chat rooms as severe and classified it as a new and variant form of financial crime. In 2023, during two rounds of focused crackdowns on 'financial crimes infringing on people's livelihood' in the first and second halves of the year, illegal activities in investment leading chat rooms were included as targets for enforcement. The police directly analyzed cases reported to police stations nationwide and led focused investigations from the National Police Agency, achieving significant results in dismantling criminal organizations.
However, perpetrators recruit victims using non-face-to-face methods involving burner phones and bank accounts to evade law enforcement tracking. They have been advancing their methods by approaching those who suffered investment losses in the first round and embezzling money again under the pretext of 'helping recover losses,' similar to traditional 'phishing' crimes. Accordingly, the National Investigation Headquarters of the Korean National Police Agency judged that stronger measures than the existing 'special crackdown on financial crimes infringing on people's livelihood' are necessary and will conduct a separate special crackdown exclusively targeting 'illegal activities in investment leading chat rooms.'
This special crackdown is the first enforcement action specifically targeting 'illegal activities in investment leading chat rooms.' The main targets include △ acts of embezzling money by providing false information to victims △ embezzlement of victims' investment funds △ unfair trading practices such as market manipulation and use of insider information △ unregistered illegal business activities. The police plan to gradually expand the scope of enforcement by including other types of illegal activities in investment leading chat rooms beyond these four categories.
The police also plan to actively apply charges of criminal organization formation against those conducting illegal activities in investment leading chat rooms. Regarding criminal proceeds, the Act on the Regulation and Punishment of Criminal Proceeds Concealment will be applied, and strict enforcement measures such as seizure before prosecution will be taken.
A representative of the National Investigation Headquarters of the Korean National Police Agency stated, “Previously, phone financial fraud crimes showed characteristics of non-face-to-face, online, burner items, and cross-border elements, and recently, crimes have evolved while exhibiting all these characteristics, especially in investment leading chat rooms.” He emphasized, “Since identifying and apprehending perpetrators requires considerable time and effort, prevention to avoid becoming a victim is most important.”
He added, “Any investment solicitation by unknown persons via phone calls, texts, or social networking services should be doubted unconditionally, and promises of principal guarantees or high returns are typical methods exploiting victims’ difficult economic situations.” He urged, “Please remember that there is no such thing as a completely safe investment anywhere.”
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