Charges of Fraud and Criminal Organization Activities
A group operating a quasi-investment advisory office and embezzling approximately 9.8 billion KRW from investors has been collectively handed over to the prosecution.
On the 12th, the Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency announced that they had arrested and sent to prosecution three individuals, including the quasi-investment advisory company representatives Mr. A and Mr. B, on charges of fraud, organized crime group formation and activities. Additionally, 101 members of the organization, including branch managers and team leaders, were sent to prosecution without detention.
They are accused of operating a quasi-investment advisory office without registering as virtual asset service providers from October 2022 to June last year, embezzling approximately 9.8 billion KRW from 168 investors.
They operated offices in Geumcheon-gu, Seoul, and the Anyang-si area of Gyeonggi Province, deceiving investors by claiming, "C Coin, listed on overseas exchanges, can be purchased at a price lower than the market price through the foundation's private sale, and you can earn over 300% profit from the start," making it seem as if they were providing exclusive premium information only to VIP members to induce investment. When members purchased virtual assets, they manipulated the price by artificially inflating it and then causing it to crash, thereby embezzling the investment funds.
On average, each investor purchased virtual assets worth about 30 million KRW (300,000 units), with the highest investment by a single member amounting to approximately 600 million KRW. C Coin's price once soared to 1,184 KRW on overseas exchanges but has since plummeted to 2.7 KRW.
During the same period, Mr. A and Mr. B drove luxury foreign cars such as Bentley and Porsche, purchased numerous luxury goods including high-end watches and bags, and lived lavish lifestyles. Organizational members such as headquarters chiefs, directors, and branch managers also received commissions distributed according to their ranks from the sales revenue.
Luxury brand boxes seized from the residence of the group. Provided by Seoul Metropolitan Police Agency
In March of this year, the police received intelligence that a company was registering as a quasi-investment advisory firm and selling virtual assets to members of stock leading chat rooms, prompting an investigation. In early April, search warrants were executed at 11 locations including the headquarters, sales branches, virtual asset foundation offices, and suspects' residences, resulting in the seizure of 1.7 billion KRW in cash, 71 luxury items including high-end watches, and the identification and arrest of 104 suspects. The police applied for pre-indictment seizure and confiscation of criminal proceeds amounting to approximately 5.6 billion KRW.
A police official stated, "Most of the victims were elderly or middle-aged individuals who were vulnerable due to their lack of knowledge about virtual assets from the start, indicating that the crime was planned targeting this demographic." He added, "When someone unknown recommends an investment, it is necessary to verify whether the virtual asset service provider is properly registered, and be suspicious of investment solicitations that guarantee principal and high returns."
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