Prosecutors Collaborate with FBI to Aid 8 Victims of Cryptocurrency 'Ripple' Phishing Scam

Refund of damages amounting to 140 million KRW

Cryptocurrency 'Ripple' Phishing Scam Diagram. / Provided by the Supreme Prosecutors' Office

[Asia Economy Reporter Choi Seok-jin, Legal Affairs Specialist] The prosecution, in cooperation with the U.S. Federal Bureau of Investigation (FBI) and the U.S. Federal Enforcement Agency, has provided relief to domestic victims affected by the cryptocurrency 'Ripple' phishing scam.

The Cyber Investigation Division of the Scientific Investigation Department at the Supreme Prosecutors' Office (Chief Prosecutor Jeong Young-su) announced on the 23rd that through Korea-U.S. international cooperation, they have refunded a total of approximately 140 million KRW in damages to eight domestic victims who fell prey to the 'Ripple' cryptocurrency phishing scam.

Issued in 2012, the blockchain-based cryptocurrency 'Ripple' is one of the major cryptocurrencies with a market capitalization of about 55 trillion KRW as of this month.

Based on intelligence from the FBI in May 2018, the Cyber Investigation Division created investigative materials and transferred the case to the Seoul Eastern District Prosecutors' Office to initiate an investigation. In August of the same year, the prosecution arrested Korean suspects Mr. A and Mr. B, and later identified a Japanese suspect, Mr. C.

In September 2018, the prosecution indicted Mr. A in custody and Mr. B without detention, while the Japanese suspect Mr. C was subject to a suspension of prosecution. In the subsequent trial, Mr. A was sentenced to 2 years and 6 months imprisonment, and programmer Mr. B received a 1-year prison sentence with a 2-year probation, according to the prosecution.

According to the prosecution, Mr. A and others set up a 'Ripple' cryptocurrency phishing site on a U.S. server, luring victims to access it via email. They obtained actual site login information by tricking victims into entering their IDs and passwords, then embezzled the cryptocurrency.

Using this method, a total of 61 victims?24 Koreans and 37 Japanese?were defrauded of approximately 900 million KRW worth of 'Ripple' cryptocurrency. As of this month, the damage amount converted at the current 'Ripple' price (1 XRP = 973 KRW) amounts to about 2.35 billion KRW.

Both Korea and the U.S. achieved results not only in the investigation but also through close cooperation in procedures for victim compensation.

In March 2019, the FBI discovered and successfully froze and seized Mr. A's cryptocurrency hidden in a U.S. cryptocurrency exchange. In April of the same year, Chief Jeong Young-su of the Cyber Investigation Division and other Korean prosecutors visited the FBI and the Japanese National Police Agency to explain the case and share information for the arrest of Mr. C.

In June 2019, the FBI selected 10 victims believed to be related to the seized cryptocurrency and notified the Cyber Investigation Division. Subsequently, the division met with eight victims who could be contacted, explained the background of the refund, and collected consent forms and other necessary documents to send to the FBI.

In August of this year, the FBI sent a refund approval notice to the Cyber Investigation Division, and finally, last month, the U.S. completed the transfer of refund funds to the accounts of the eight victims.

A representative from the Supreme Prosecutors' Office stated, "This is the first successful case where the prosecution has conducted a one-stop process from investigation to victim compensation for cryptocurrency fraud crimes through international cooperation," adding, "The Cyber Investigation Division will continue to strive for international cooperation in cybercrime investigations as well as practical victim compensation."

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