[Exclusive] 300 People and Over 10 Billion Won Lost in Virtual Asset Investment Scam... Police Launch Investigation

Over 300 Victims... Four People Booked and Under Investigation
Police Make All-Out Effort to Arrest Main Culprit

[Asia Economy Reporters Jang Sehee and Choi Taewon] The police have launched an investigation into 'Bionwise,' which deceived investors by promising high returns on virtual asset investments and then disappeared after collecting investment funds. It is reported that the police began the investigation after receiving complaints filed nationwide, including in Seoul, Gyeonggi, Busan, and Jeju.

[Image source=Yonhap News]

On the 28th, according to a comprehensive report by Asia Economy, the Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency has booked and is investigating four individuals, including a man in his 60s identified as A, on charges of violating the Act on the Regulation of Conducting Fund-Raising Business Without Permission and fraud under the Act on the Aggravated Punishment of Specific Economic Crimes (Special Act). They are suspected of receiving tens of millions of won under the pretext of recruiting investors.

So far, 327 victims have been identified, with total damages amounting to 9.62 billion won. The police have determined that most of the victims' funds went to the main perpetrators, while the recruiters received tens of millions of won for office operations and organizing investment briefings.

Bionwise recruited investors offline through investment briefings and via Telegram for about three months from February to May last year. They deceived investors by promising daily high returns of 3.1% to 3.7% on investments in virtual assets such as Bitcoin and Ethereum, then embezzled the funds. Subsequently, they shut down their website and community platforms and disappeared. To deceive investors, they even uploaded Bionwise’s financial statements and registration documents of their Irish headquarters on YouTube.

The four individuals currently booked reportedly admit to charges related to unauthorized fund-raising activities but deny the fraud charges. A police official stated, "We have identified the four through the execution of search warrants on their mobile phones and financial accounts," adding, "We will focus all efforts on identifying additional victims and apprehending the main perpetrators."

As fraud crimes involving cryptocurrencies increase, attention is also focused on whether actual punishments will be enforced. In 2019, a man identified as A was sentenced to five years in prison and fined after earning about 3 billion won by distributing virtual currency used within a blockchain-based webtoon platform and promising investors up to 100 times returns. At that time, exaggerated false disclosures or announcements about market conditions or the feasibility of the underlying business served as the basis for the crime judgment. If the information was false or highly unlikely but still announced, it could be punishable as fraud under the Special Act.

Under the Special Act, fraud involving damages exceeding 5 billion won can result in life imprisonment or imprisonment for five years or more. Those who conduct unauthorized fund-raising activities face imprisonment for up to five years or fines up to 50 million won.

Professor Lee Woonghyuk of Konkuk University’s Department of Police Science said, "Since virtual asset fraud often occurs in underground markets, investigations themselves will be challenging," adding, "However, progress in investigations is expected once these activities fall within the legal regulatory framework."

Park Seongjun, director of the Blockchain Research Center at Dongguk University, pointed out, "Because the cryptocurrency market exists in reality, people tend to trust cryptocurrencies. However, due to insufficient laws and regulations, there are almost no channels to obtain information about which cryptocurrencies are good or bad." He emphasized, "To prevent their use in crimes, the market should provide credible information, and the government should promote awareness of investment risks."

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