South Korean Crypto Chat App Channel Scams on the Rise, Warn Police

South Korean crypto scammers are targeting chat app users on trading- and investment-themed channels, police warned on February 21.

Per News1 and Daejon Ilbo, the Sejong South Police Station announced it was investigating multiple cases.

The agency said that it had “received about 20 reports” from people in the city. Citizens said they had been “deceived by false or exaggerated claims” in so-called investment “reading rooms.”

South Korean Crypto ‘Reading Rooms’ Now ‘Rife’ with Scammers?

South Korea’s retail crypto market is large and highly active. Investors regularly congregate online in chat app channels often labelled “reading rooms.”

Most use apps such as Telegram and its channels function, as well as KakaoTalk’s Open Chat feature.

Cryptonews.com has seen hundreds of crypto-themed chat rooms on KakaoTalk, some of which have up to 1,500 members. Smaller channels also have hundreds of members.

Most of these channels are populated by traders talking about the future of BTC and popular altcoin prices. Some others are entirely dedicated to little-known, low-cap tokens or obscure trading platforms.

Upon visiting some of these rooms, Cryptonews.com was able to spot what appeared to be posts from obvious scammers promising “guaranteed monthly gains.”

Some of these prompted channel group members to send them direct messages (DMs) for further details.

In some cases, messages – possibly from potential scammers – appear to have been deleted by channel moderators, with members removed.

Other, smaller rooms claimed to be run by expert traders who were willing to share their investment secrets.

‘Crypto Scammers’ Also Active on YouTube?

Police said many victims “joined investment reading rooms” after “seeing false and exaggerated advertisements on YouTube.”

These include promises of “guaranteed returns of at least 500% on initial stakes” and talk of “advanced crypto trading tips.”

Officers said that many “reading room” operators offer free services. But they often “later encourage people to join [paid] VIP member rooms.”

Those who do so are inevitably prompted to “deposit large amounts of money” on unlicensed crypto exchanges.

Scammers then “reassure” their “victims” that profits will soon be forthcoming, police said.

But, officers explained, these scammers then unfailingly “either disappear or refuse to return their victims’ money.” A police official said:

“There is no such thing as a financial investment that can produce high returns while guaranteeing the initial stake. ‘Crypto reading room’ members must always be suspicious of potential fraud.”

Bithumb Korea, the operator of the country’s No. 2 cryptocurrency exchange Bithumb, has failed to seal a deal with major local lender KB Kookmin Bank for issuance of real-name accounts, jeopardizing its plan to attract more traders.https://t.co/7nuvJj42Xo

— The Korea Herald 코리아헤럴드 (@TheKoreaHerald) February 16, 2024

In December 2023, police in Busan said they had shut down a $32 million chat app-based crypto scam ring run by a network of “gangsters.”

Officers said that nine groups of “violent gangsters” operated such “crypto reading room” sites on chat app platforms.

Police made 87 arrests, and said that the gang duped 572 people “nationwide” to invest in bogus South Korean crypto sites.