[The Editors' Verdict] Coin Scams: Should We Only Blame Ignorance and Greed?

Despite Meticulous Crime Organizations,
Legal and Institutional Safeguards Remain Inadequate

"Although the defendants' criminal acts are the main cause of the case, the victims' greed for profit is also partly to blame." (November 24, 2021, Uijeongbu District Court Goyang Branch ruling)

"There is an aspect of deciding to invest out of greed to gain high returns in a short period without properly reviewing the business feasibility and profitability." (September 23, 2022, Suwon District Court ruling)

The Asia Economy Securities Capital Market Special Investigation Team published a special report titled 'Coin Scam Republic - They Were Meticulous' in mid-July. It consisted of four major themes with a total of 10 exclusive articles: <1>Why did Korea become a Coin Scam Republic? <2>They were cunning and meticulous <3>Families were broken and retirement funds vanished <4>To prevent 'lawless zone' coin crimes. The response was intense. Each article received hundreds of comments and support messages. Tip-off emails poured in. Many wanted to report scam organizations and scam damages. What does this influx of tips signify? It means that coin investment scams continue to emerge daily.

Victims met during the investigation feared being finger-pointed. They said they were criticized as greedy and foolish. Reproaches of victims' greed and ignorance can also be seen in criminal rulings. We secured and analyzed 162 domestic criminal rulings (all final rulings since 2021) containing the keywords 'coin' and 'multi-level marketing.' One in three rulings pointed out the 'victims' unrealistic greed.' Many rulings mentioned that victims invested their money without careful review of the business. Among all rulings, 53 cases (32%) considered such victim responsibility as a mitigating factor favorable to the defendants.

South Korea has already fallen into a Coin Scam Republic. The cow is already lost. Yet, there is no intention to fix the barn, blaming only the victims' ignorance and greed. It is not right to blame only them. The scam organizations uncovered by the special investigation team were cunning and meticulous. Operating with a thorough system, they conducted organized scams nationwide. Once caught, escape was impossible. It is urgent to establish legal systems for proactive and preemptive responses by government agencies to prevent scam organizations from running rampant. To minimize coin scam damages, the 'Special Act on Prevention of Telecommunications Financial Fraud and Refund of Damages (Telecommunications Fraud Damage Refund Act)' must be revised again. Freezing withdrawals from related accounts immediately upon recognizing coin scams can reduce damage scale. Currently, victims can only helplessly watch their money being withdrawn even after realizing the scam too late. Since there are no punishment provisions for salespeople involved in coin multi-level marketing scams, amendments to the Door-to-Door Sales Act are also necessary to eradicate scam damages.

Penalties must also be strengthened. Coin scam organizations often plan multiple scams simultaneously in an organized manner, and because victims increase rapidly online, the damage amount is generally large, so sentencing should be intensified. Regulation of 'illegal overseas exchanges,' the main stage of coin scams, is also necessary. 'Illegal overseas exchanges' have been neglected for over two years amid government agencies shifting responsibility, producing large-scale damages in collusion with domestic scam organizations amid regulatory gaps. Self-regulation of domestic social networking service (SNS) platforms recruiting coin scam victims must also be strengthened. We know how to fix the barn. It is not the time to stand by saying victims' ignorance and greed cannot be held responsible. It is time to pursue all possible measures to suppress coin scam crimes before the entire nation suffers from coin scams.

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