500 Billion Won Cryptocurrency Scam... 2 of 15 Suspects Arrested

"Fraudulent Investment of Approximately 55.2 Billion KRW from Over 2,600 People"
"Methods Include Coin Listing and Development of US Lottery Number Prediction Program"

A group of perpetrators who committed a so-called 'Ponzi scheme' by paying dividends from new investments to existing investors were arrested by the police.
[Image source=Yonhap News]

[Asia Economy Intern Reporter Kang Woo-seok] A group that defrauded about 2,600 people of approximately 50 billion KRW using cryptocurrency as bait has been arrested by the police.

The Busan Metropolitan Police Agency's Violent Crime Investigation Unit apprehended 15 people on the 21st on charges of violating the Act on the Regulation of Conducting Fund-Raising Business without Permission, and among them, two individuals, Mr. A (in his 60s) and Mr. B (in his 40s), were detained.

From January 2020 to August 2021, they established an investment company called "XX Best" in the Busan and Daegu areas and are accused of defrauding a total of about 55.2 billion KRW from over 2,600 people by promising to pay 1% of the investment amount 90 times if they invested in coin and electronic lottery businesses.

They advertised that the coins they issued themselves would soon be listed on exchanges and generate significant profits, and deceived victims by claiming to have developed an artificial intelligence (AI) program capable of predicting winning numbers of the U.S. lottery.

Police investigations revealed that there were no actual investment profits, and the group sustained the crime over a long period by using new investment funds to pay dividends to existing investors, a so-called "Ponzi scheme."

After receiving intelligence in July last year that "coin investment briefings" were being held targeting elderly people, the police raided the office and secured investor lists and investment details.

Mr. A, the Busan area representative of the company, denies the crime, but the police succeeded in detaining him through digital evidence analysis. Mr. B, the Daegu area representative who was on the run, was captured and detained after a tracking investigation at his hiding place.

To expedite victim restitution, the police, together with the Crime Proceeds Tracking Team, applied for seizure and preservation of assets acquired with the crime proceeds, such as hotels and lease deposits, before prosecution. Additional hidden assets are also being investigated. Furthermore, additional damage reports are being accepted for some victims who have not yet realized they were harmed.

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