[Exclusive] Wacon's 500 Billion Won Coin Scam Expands to Vietnam... Prosecution: "Ponzi Investment, No Ability to Pay Returns"

Indictment Obtained for Wacon CEO Accused of 500 Billion Won Pyramid Scheme Fraud
Prosecutors: "No Ability to Pay Returns Without Continuous Investment Attraction"
Expanded Branches to Vietnam, Thailand, and Indonesia

The prosecution confirmed that it included in the indictment that Byeon Mo, CEO of Wacon, suspected of illegally attracting virtual asset (coin) investment funds worth 500 billion KRW, and his accomplice Yeom Mo, who were arrested and indicted last month, stated, "Since it was an investment attraction method so-called 'Ponzi scheme,' they had neither the intention nor the ability to pay the promised investment returns to investors without continuously attracting new investors."

It was regarded as a fraudulent crime in the form of a multi-level Ponzi scam. The prosecution also stated in the indictment that Byeon and Yeom told victims, "We provide a 20% return in 40 days, and if you introduce one investor, you can receive 2.5% of the returns every 10 days as a referral fee, and cancellation is possible anytime after 40 days."

According to the indictment obtained by Asia Economy on the 13th, from December 2020, Byeon and Yeom formed an executive team including a general director, director, and managing director, established branch offices as subordinate organizations nationwide, and set up a Wacon office around April 2021 in Gangnam, Seoul. They raised funds under the pretext of investing in Wi-Fi Coin, Conpay Coin, etc., but when investors filed a fraud complaint around September 2021, claiming they did not receive their returns properly, the prosecution viewed that they embezzled funds under the guise of Wacon's new Ethereum staking business.

However, the projects promoted by Wacon showed no progress and were mainly for external promotion, generating no profits, and the prosecution believed that it was difficult to expect future profits unless there were special circumstances. The prosecution stated in the indictment, "The amount of Ethereum held by investors confirmed in computer programs such as 'Tipping Point' only indicated the returns investors should receive from Wacon, but Wacon did not actually hold virtual assets corresponding to the amount of Ethereum."

The prosecution judged that since the investment attraction was a so-called 'Ponzi scheme' where funds from new investors were used to pay returns to existing investors, they had neither the intention nor the ability to pay investment returns. Accordingly, the prosecution applied charges of violation of the Specific Economic Crimes Act (fraud) amounting to 54.0158 billion KRW and violation of the Act on the Regulation of Similar Financial Business Activities amounting to approximately 504.17894 billion KRW against Byeon and Yeom.

On February 15 last year, Byeon Mo, identified as the main suspect in the Wacon coin fraud case, is giving a lecture at the 'Wacon Vision and Business Briefing' held in Yeoksam-dong, Gangnam-gu, Seoul. [Image source=Wacon Victims Countermeasures Committee]

The Wacon Victims' Countermeasure Committee stated that the scale of damage is much larger than the 504.1 billion KRW specified in the indictment. They explained that the number of victims and the amount of damage in the indictment only include those whose damage could be proven and who were able to file complaints. Since Wacon closed its platform to destroy evidence of coin fraud, making victim relief practically difficult, the number of victims who gave up filing complaints out of despair is believed to be several times higher, according to the committee.

Park Jung-won, chairman of the Wacon Victims' Countermeasure Committee, said, "The police only investigated Tipping Point and Main Ethereum, but Wacon established related subsidiaries and changed platforms countless times, producing many victims," adding, "The estimated number of victims internally is about 12,000, and the amount of damage is expected to reach trillions of KRW."

Furthermore, according to an organizational chart of Wacon additionally obtained by Asia Economy from the Wacon Victims' Countermeasure Committee, Wacon appears to have attracted investors by establishing branches in Hanoi, Vietnam; Thailand; and Indonesia (Ethernesia Corporation). After establishing headquarters in three locations around Teheran-ro, Gangnam, Wacon created domestic branches in 11 locations including Wonju, Gangwon Province; Jeonju, Jeollabuk-do; Daegu; Ulsan; Busan; Changwon, Gyeongnam; Bucheon, Gyeonggi-do; Gwangju; Gunsan, Jeollabuk-do; and Gumi, Gyeongbuk, and then expanded overseas branches.

In a lecture introducing the status of business permits in Indonesia, Wacon stated, "We operate a cryptocurrency exchange officially certified by the Indonesian government." It is also known that they recruited foreigners and posed as officials of Indonesia's largest medical institution, promoting cooperation with the medical institution's center director and medical blockchain.

Buckingham Holdings, which operates medical and land development businesses in Indonesia, has filed a complaint regarding the 118 Ethereum investment fraud case related to Korea's Wacon. A victim of Wacon Coin, Mr. A, said, "In June last year, when withdrawals were blocked, Wacon held a large event explaining its vision," adding, "I believed and waited, thinking that a new platform was being developed and that the principal could be recovered through additional investment, but eventually I had to file a complaint."

When asked about the prosecution's indictment and the scale of damage, the defendants' lawyers said, "If there is anything to disclose, we will contact you," but did not respond by the morning of the 13th. The first preparatory hearing for Byeon and Yeom is scheduled for the 24th.