Scam Group Posing as "Loss Recovery" Sells Scam Coins... Pocketed 7.1 Billion Won

Incheon Police Agency, 9 Arrested and 84 Booked
Impersonating Mid-sized Company CEO to Induce Additional Purchases

A fraud organization that approached people who suffered losses from stock and coin investments, promising to compensate their losses and then inducing them to buy another coin, has been caught by the police after pocketing over 7 billion KRW.

On the 5th, the Metropolitan Investigation Unit of the Incheon Metropolitan Police Agency announced that they had arrested nine people, including the ringleader Mr. A (35), on charges of organized crime and telecommunications financial fraud, and booked 84 others, including telemarketer Mr. B (25), without detention.

The scene of the 'Scam Coin' fraud organization gathered at a company dinner venue
[Photo by Incheon Police Agency, Yonhap News]

Mr. A and others are suspected of setting up offices in four locations including Incheon and Uijeongbu, Gyeonggi Province, from August last year to May this year, and embezzling 7.1 billion KRW from 123 victims. They illegally purchased the names and phone numbers of people who had previously invested in stocks or coins and suffered losses from Telegram, then called them pretending to be the "Securities Company Loss Recovery Team."

They lied to the victims, saying, "According to the Financial Supervisory Service guidelines, we are refunding those who suffered losses from stocks or coins," and "Due to the Financial Transaction Protection Act, compensation cannot be made in cash, so it will be paid in coins." They then made it appear as if the coins, which were essentially worthless, would soon be listed on domestic virtual asset exchanges and their prices would rise significantly, inducing victims to purchase these coins.

Later, team leader-level members impersonated actual mid-sized company CEOs and approached victims again, saying, "I called after seeing the coin ledger," and deceived them by saying, "The coins you hold have considerable investment value, so we will buy in bulk; please adjust the quantity in units of 10,000." Believing this, the victims contacted the telemarketers again to purchase additional coins.

Messenger conversation capture between the victim and a member of the fraud organization [Image source: Provided by Incheon Police Agency, Yonhap News]

However, the team leader impersonating the company CEO postponed the coin transactions on the scheduled date by claiming, "I was in a traffic accident," or "I was hospitalized due to COVID-19," and eventually cut off contact. The coins that Mr. A’s group gave away for free or sold to victims were scam coins with almost no real value, as they were subject to a lock-up period restricting trading on overseas virtual asset exchanges, according to investigations.

Mr. A’s group, mainly composed of the 'MZ generation' (born early 1980s to early 2000s), recruited members in their 20s and 30s by bringing in friends or using social networking services (SNS). The organization, divided into 11 teams, strictly divided roles between telemarketers selling scam coins and team leaders impersonating mid-sized company CEOs to induce additional purchases of scam coins. They took 5-35% of the criminal proceeds as their share.

The members operated systematically, reporting daily scam coin sales performance to Mr. A and higher-ups, and held regular gatherings and paid performance bonuses to strengthen cohesion.

The police received a tip in May that they knew the office location of the coin fraud organization and, after five months of investigation, were able to arrest all members of Mr. A’s group. They also froze about 750 million KRW of the criminal proceeds as pre-indictment seizure and confiscation.

A representative of the Incheon Metropolitan Police Agency’s voice phishing task force warned, "Recently, new types of fraud have been occurring nationwide where perpetrators approach victims claiming to compensate investment losses and induce them to purchase coins," urging caution.

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