1000 Cases of Illegal Investments Including "Make Money with AI" Detected

Published 18 Feb.2024 15:41(KST)

On the 18th, the Financial Supervisory Service announced that it had detected about 1,000 illegal financial investment-related websites and posts that defraud funds by luring with high returns, and requested the Korea Communications Standards Commission to block them. Among these, 56 cases with specific allegations were also referred for investigation.

Financial Supervisory Service, Yeouido, Seoul. Photo by Huh Younghan younghan@

Among the illegal financial investment operators referred for investigation, the most common type was investment brokerage through fake investment applications, accounting for 26 cases (46.4%). This was followed by investment trading involving selling unlisted stocks at high prices with 21 cases (37.5%), and unregistered or unreported investment advisory with 8 cases (14.3%).

As for investment targets, there were many investment frauds using high-risk investment products that are difficult for the general public to obtain information on or that have high short-term price volatility, such as futures trading with 22 cases (39%) and unlisted stocks with 20 cases (35%).

The Financial Supervisory Service explained that recently, the methods have evolved to lure consumers using new investment techniques disguised as generative artificial intelligence (AI) such as ChatGPT, which has attracted significant social interest, or by impersonating regulated financial companies. They induce the use of fake investment applications by impersonating high-ranking officials, professors, etc., claiming that using AI programs developed by global asset management firms or automated trading programs based on generative AI can yield high returns. Illegal financial investors promote that even beginners can achieve high returns with an 80-98% probability by learning from vast amounts of trading records, and after attracting investors, they decorate the app screen to appear as if large profits were made, then claim that a program error caused significant losses, defrauding investment funds and disappearing.

There were also cases detected where fraudsters impersonated securities firms, claiming to be conducting secret projects to collect funds or inducing the installation of fake investment apps by promising the allocation of many shares at low prices in initial public offerings.

The Financial Supervisory Service warned, "Losses caused by transactions with illegal operators are practically impossible to recover," and urged, "Be cautious by learning the precautions and response methods in advance to avoid damage." The Service emphasized rules such as never using accounts under another person's name due to the prevalence of crimes impersonating regulated financial companies, always verifying whether the person is an employee of a financial institution, and carefully confirming the facts before deciding on investments in unlisted stocks that use listing as bait.