The Gwangju Police Agency Cyber Crime Investigation Unit has arrested 28 individuals involved in a cryptocurrency investment fraud scheme under Article 345 of the Criminal Code of the Republic of Korea. The group duped their victims out of more than $13 million.
The Korean scammers operated using a scheme as ancient as it is effective.The scam involved allegedly exclusive insider information about a "new promising token" soon to be listed on exchanges, which investors were urged to buy into "right now." This type of scam, known as a honeypot trap, tricks investors by offering illusory gains.
South Korean law enforcement uncovered a variant of the honeypot involving the sale of a token that included a smart contract prohibiting resale. Victims were lured to illicit websites trading virtual assets, where they were conned into investing in a token they could never sell.
The scheme was promoted using YouTube and other social media platforms, where perpetrators posed as investment experts.
Investigations revealed that from July to December 2023, the criminal group fraudulently acquired approximately 1.8 billion won ($13.3 million) from 51 victims.
Police arrested 28 people in the crackdown. Of these, six remain under arrest, while 22 were released on bail.
Police arrested 28 people in the crackdown. Of these, six remain under arrest, while 22 were released on bail.
Legal assessments are also underway to determine if the fraudsters' actions qualify as those of an organized criminal group.
The Gwangju police department has extensive experience dealing with crypto fraud, having previously arrested the organizers of a criminal investment scheme involving BitConnect in 2018, which resulted in losses of 6.5 billion won ($47.7 million) to unsuspecting Koreans.
In December 2022, the department handled a fraud case involving the shitcoin FTB, in which even the head of the investigative team was implicated. The fraudsters claimed FTB Coin (Fit&Beat) was about to be listed on major foreign exchanges, including Binance.
Never hastily invest in assets promoted on social media platforms. Even if you've been following an account for a long time, there's no guarantee that the actual owner hasn't changed or allowed their channel to be used for promotional campaigns linked to fraudulent schemes.
