Lured Investors with Bitcoin-Tether Mutual Brokerage Scheme
Swindled 32.8 Billion Won from 1,408 Victims
A group that swindled hundreds of billions of won through a multi-level virtual asset investment scam has been handed over to the prosecution.
On April 24, the Seoul Metropolitan Police Agency's Criminal Investigation Unit announced that it had referred Mr. A, a man in his 50s and the head of the fraudulent company, and Mr. B, a man in his 50s and the chief recruiter, to the prosecution under arrest on charges of violating the Act on the Aggravated Punishment of Specific Economic Crimes (fraud) and fraud.
Mr. A went into hiding to evade the police investigation but was apprehended and handed over to the prosecution under arrest on October 30 last year. Mr. B did not flee and cooperated with the police investigation without missing any questioning, but was also referred to the prosecution under arrest on April 10 due to concerns over possible destruction of evidence. The police also referred 16 other individuals involved in the operation, fund management, and investor recruitment to the prosecution without detention on charges of fraud and violating the Act on Door-to-Door Sales.
According to the police, the suspects are accused of defrauding 1,408 victims out of 32.8 billion won through a multi-level marketing scam.
From December 2023 to July last year, the group held seminars nationwide, including in Seoul and Daegu, without registering as a multi-level marketing business. They recruited investors by claiming that a Bitcoin and Tether mutual brokerage program would pay a daily return of 2% on investments without any losses. They operated a Ponzi scheme, using funds from later investors to pay earlier investors.
The group reportedly established 226 centers nationwide and recruited investors by sharing seminar schedules through open chat rooms. It was found that they specifically targeted people in their 50s to 70s, who typically had less knowledge about virtual assets, as their main investors. In fact, the age distribution of victims was 26.2% in their 50s, 42.6% in their 60s, and 17.0% in their 70s.
A police official stated, "If you invest based on promises of guaranteed stable returns without verifying the actual business, especially when you lack understanding of virtual assets, you are at high risk of being scammed," and added, "We will continue to expand investigations into companies committing crimes under the pretext of virtual asset trading."
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