"Guaranteed High Returns"... Warning for Retirees Targeted by 'Illegal Cryptocurrency Pyramid Schemes'

Increase in Financial Transactions Disguised as Virtual Asset Investments
Cyber Fraud Victims Aged 60+ Quadruple in 5 Years

The Seoul Metropolitan Government's Civil Affairs Judicial Police Bureau issued a warning on the 5th about illegal multi-level marketing (MLM) scams involving virtual assets.

According to the National Police Agency, the number of cyber fraud victims aged 60 and over increased about fourfold over the past five years, from 2,796 in 2019 to 11,435 last year. Crimes targeting retirement funds of retirees, the elderly, and housewives who are vulnerable to information related to virtual assets are surging. In particular, illegal MLM operators have been holding business briefings targeting older adults around Teheran-ro in Gangnam-gu, enticing them by promising virtual assets (coins, cash, pay, etc.) and then encouraging membership registration and investment, only to embezzle the invested funds. Cases of such damage are increasing.

The city advised that to prevent illegal MLM damage related to virtual assets, it is necessary to verify whether the MLM company is legally registered with the Fair Trade Commission, the Korea Special Sales Guarantee Association, or the Direct Selling Guarantee Association. It also emphasized that MLM companies operating under the guise of platform businesses related to advertising marketing (blog agencies), internet shopping mall franchises, and websites are increasing, so special caution is required regarding such companies.

The city is continuously conducting intelligence activities and investigations into illegal MLM business practices. Over the past year, 13 cases were booked for violations of the Door-to-Door Sales Act and sent to the prosecution. This year, until last month, 8 cases were booked, with 4 sent to the prosecution and 4 still under investigation.

The city plans to expand investigations into illegal MLM companies operating in a cell organization form based on its own intelligence activities and citizen reports. Kwon Soon-gi, head of the Seoul Metropolitan Government's Civil Affairs Judicial Police Bureau, stated, "We will strictly respond to minimize damage to the 50s and 70s retired generation and the elderly from MLM crimes disguised as virtual asset investments involving monetary transactions," and urged, "If you witness illegal activities or suffer damage, please report promptly."