Prosecutors Indict QRC Bank CEO and Others for 220 Billion KRW Cryptocurrency Investment Fraud

Seoul Central District Prosecutors' Office, Seocho-dong, Seoul.

[Asia Economy Reporter Choi Seok-jin, Legal Affairs Specialist] QRC Bank executives have been brought to trial on charges of committing fraud involving approximately 220 billion KRW targeting cryptocurrency investors.

According to the legal community on the 15th, the Criminal Division 3 of the Seoul Central District Prosecutors' Office (Chief Prosecutor Seo Jeong-sik) indicted QRC Bank CEO Ko (40) and former executives Ahn and Kim on the 12th on charges including fraud, violation of the Act on the Regulation of Conducting Fund-Raising Business Without Permission, and violation of the Act on Door-to-Door Sales.

Ko and others are accused of deceiving investors from December 2019 to October last year by promising a 300% return on investments in an integrated financial platform business involving cryptocurrencies and related coin trading businesses, and by guaranteeing daily payments based on investment amount, number of referrals, and rank-based allowances, thereby embezzling approximately 88.2 billion KRW from victims. It was also investigated that Ko embezzled about 139.5 billion KRW from victims using the same method from October last year to July this year.

The prosecution explained that the so-called "integrated financial platform business involving cryptocurrencies" refers to a financial platform development project that encrypts QR codes to enable free remittance, exchange, and payment between fiat currency and cryptocurrencies.

Additionally, they are accused of deceiving investors last October by promising returns if they purchased the Korean branch rights of a digital bank being established overseas based on the integrated financial platform, embezzling 3.15 billion KRW from victims.

Ko was also charged with embezzling 550 million KRW from victims using the same method between October and November last year.

Furthermore, Ko is accused of deceiving investors from April to May this year by claiming that QRC Bank was receiving investments from companies listed on the U.S. Nasdaq and was scheduled to be listed on Nasdaq, thus encouraging them to purchase stocks, embezzling approximately 4.9 billion KRW from victims.

They continued their fraudulent activities in the form of unauthorized fundraising and multi-level marketing, paying profits differentially according to the so-called "Global Reward Plan," which included "Daily Bonuses" proportional to investment amounts, "Promotion Matching Bonuses" based on recruitment performance of subordinate investors, and "Rank Bonuses" according to six levels of rank.

A prosecution official stated, "The defendants solicited investments by guaranteeing a 300% return on the financial platform business, but it was confirmed that the actual operation was a Ponzi scheme."

He added, "Notably, the approximately 5,400 victims of this case were mainly from lower-income groups, North Korean defectors, and ethnic Koreans from China. The prosecution and police have requested the Victim Support Office to provide necessary legal consultations and support to victims such as North Korean defectors, and to achieve substantial recovery of damages, they have petitioned the court for seizure and confiscation preservation of assets belonging to QRC Bank and its representatives, with a significant portion of asset seizure and confiscation preservation measures already implemented."

Earlier, the Seoul Metropolitan Police Agency obtained criminal intelligence related to these individuals at the end of January this year, initiated an internal investigation, arrested Ko and two others in September, conducted investigations, and then transferred the case to the prosecution.

This content was produced with the assistance of AI translation services.