S Korean Police Bust Two ‘Crypto Scam Rings’ Worth a Combined $350m – Crypto Fraud on the Rise?

South Korean police have shut down two suspected crypto scams they think are worth a combined $350 million, with hundreds of victims believed to have been duped.

Per Joongboo Ilbo, one case involved a “virtual fashion items” marketplace.

This appears to have tricked at least 435 “victims” out of a whopping $333 million.

The Suwon District Prosecutor’s Office confirmed on May 30 that it had indicted the CEO and Vice President of the marketplace on fraud-related charges.

Prosecution officials claimed that from November 2020 to September 2021, the individuals operated an “online P2P” site.

They said this site “guaranteed” investors “3-16% returns” on the stakes if they held funds on the platform “for 1-5 days.”

The prosecution also claimed that the site operators created bogus listings for “virtual” fashion items.

These included “virtual” dresses, as well as traditional Korean and Japanese attire, including hanbok and kimono pieces.

But the operators reportedly used a multi-level “pyramid system” to attract new “members” to the “marketplace.”

Prosecution officials said investors were arranged into eight levels.

Those at the highest level were reportedly told they could expect 16% returns per day.

The operators also reportedly claimed to have developed a cryptoasset that they told investors would increase in value the longer they held onto it.

Prosecutors said they were investigating 10 other people connected with the platform.

Crypto Scams Spiking in South Korea?

Meanwhile, KBS reported that another suspected crypto scam saw investors pay alleged fraudsters some $27 million.

This suspected scam operated out of Gangnam, the heart of Seoul’s crypto and finance industries.

Police said they had barred a man, identified by his surname Gu, from leaving the country.

The media outlet produced audio recordings of Gu allegedly telling groups of investors that his company was currently headquartered in Japan, but had bases in 23 nations.

Audio recordings appeared to confirm that Gu told investors that “no [investor] has suffered a loss at [the] company.”

He allegedly claimed that he would be held “personally responsible” for any losses, and said his firm was “reputable and dependable.”

Last week, police moved to arrest a suspected crypto scammer who reportedly preyed on unsuspecting “housewives and office workers.”