South Korean Police Arrest Suspects in ‘Scam Coin’ Case

A suspected scam coin operator was arrested in Gimpo, Gyeonggi Province, South Korea. According to YTN, Gimpo police charged an unnamed individual in their 20s with fraud.

Officers also said that a second individual (also in their 20s) was also charged with “aiding and abetting fraud.”

‘Scam Coin Operator’ Faces ‘Fraud’ Wrap

Police withheld details about the individual from the press for legal reasons. But the individual charged with fraud (referred to as “A” by the South Korean press) was described as the “CEO of a cryptoasset-related company.”

Officers also said that the firm in question “used celebrities such as a former national team soccer player” to promote a coin.

Soccer Star Says Images Were Used Without Permission

Earlier this week, Lee Chun-soo, a star of the 2002 World Cup, admitted that he spoke to operators of the soccer-themed Golden Goal (GDG) coin.

Lee said he spoke to GDG executives about a possible NFT collaboration in 2021.

GDG officials released photos of Lee Chun-soo in September 2021 in a bid to promote the project.

Investors in the project also said the GDG masterminds sent group chats claiming that “Lee Chun-soo [was] close” to “joining” GDG.

But Lee this week complained that the photos had been used without his permission or knowledge.

Police speaking about A’s arrest, meanwhile, explained that investors were told they could “benefit from buying a token before it was listed on domestic exchanges.”

However, the token in question was never listed on a domestic trading platform. Investors said they were later blocked from withdrawing their stakes from a coin-related platform. Police explained:

“A is accused of defrauding around 30 investors out of over $2.25 million. This individual began operating a virtual currency business in March 2021.”

Officers also said that the soccer player in question “reportedly explained that he had nothing to do with the virtual currency issued by this company.”

Police failed in a bid to arrest A last year when a court turned down their request for an arrest warrant.

However, officers succeeded with a more recent bid, likely in the light of Lee’s comments.

Police spokespeople said they “plan to complete” their investigation into A and the second suspect “soon.”

A and the second individual were released pending a court hearing, but officers said they intended to hand the case to the prosecution.

Increasing Scrutiny

There is also increasing scrutiny in South Korea over so-called “scam coin” projects allegedly linked to a blockchain firm named Winnerz.

The controversy surrounding Winnerz has seen multiple celebrities with suspected ties to executives distance themselves from the firm.

Winnerz operates the WNZ coin, which is listed on overseas exchanges. The firm operates a number of sports ventures and blockchain-related operations.

Celebrities Deny Involvement

Leading YouTubers, TV personalities, and social media stars have moved to deny links between themselves from Winnerz in the past week as controversy over so-called scam coins continues.

An anonymous post, published by individuals claiming Winnerz was operating a “multi-level scam” went viral on February 5. The investors said they had taken their case to the police.

And the YouTuber Oking last week published a video where he admitted to making anonymous investments in Winnerz.

Japan's Prime Minister Fumio Kishida is considering visiting South Korea on March 20, broadcaster Fuji TV reported https://t.co/HxIEIQ4VZ5

— Reuters (@Reuters) February 14, 2024

Also this month, regulators hinted that they may investigate the 2023 NFT-powered concert ticket sales of the K-pop star and “Gangnam Style” singer PSY.