"Guaranteed High Returns on Coin Investment"... 18 Billion KRW Embezzled from 4,200 People

Daegu Police Arrest 25, Detain 4

Method of Delisting Immediately After Exchange Listing

The Daegu Metropolitan Police Agency (Chief Kim Soo-young) Cyber Investigation Division announced on the 6th that they have arrested 25 individuals, including a virtual asset developer and a multi-level marketing company center chief, on charges of pocketing 18 billion KRW from 4,221 investors.

The group used a method from August 2020 to June 2021 where they attracted investment funds by promising high returns before listing on domestic exchanges, then manipulated the market price after listing and subsequently delisted the coins.

The police, considering the difficulty of investigation and social damage related to virtual asset investment fraud cases reported to police stations, concentrated the investigation under the Daegu Metropolitan Police Agency Cyber Investigation Unit.

Daegu Police Agency.

The police arrested four suspects, including Mr. A, the representative of the virtual asset issuing company (known as the ‘Issuing Foundation’) who designed the issuance of listed coins, poor whitepapers, and false disclosures; Mr. B and Mr. C, top-level center chiefs of the multi-level marketing organization who recruited thousands of investors; and Mr. D, an executive of the headquarters, on charges of fraud and violation of the Act on the Regulation of Conducting Fund-Raising Business without Permission.

A police official stated, “They issued poor-quality coins, recruited investors by promising high returns through multi-level marketing, listed the coins on exchanges, manipulated the market price, and then immediately delisted them to pocket the money. Recruitment centers were set up in places like Gumi, and victims are spread nationwide.”

The police conducted rapid raids and verified false disclosures and poor whitepapers, analyzed extensive transaction records of the criminal accounts, tracked coin movement paths, and identified accomplice relationships and the flow of criminal proceeds to prove the charges.

Also, since about 4,000 victims were involved in this case, the police swiftly traced the criminal proceeds and preemptively seized 9.57 billion KRW before prosecution.

The police plan to continue investigating illegal activities during the listing process, including sending Mr. E, a former executive of the exchange where ‘○○ Token’ was listed, to prosecution on charges of aiding fraud and illegal fundraising.

The police advised caution in investment, noting that before listing, virtual asset issuing foundations and multi-level marketing companies often collude to sell virtual assets in a form guaranteeing profits or attract investors through unverified channels such as leading chat rooms, and that even after listing, there is a possibility of market manipulation by specific groups.

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