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South Korean authorities, led by the National Police Agency, have uncovered and dismantled an elaborate cryptocurrency fraud ring responsible for defrauding over 15,000 individuals out of more than $232 million. The agencies arrested 215 suspects, 12 of whom were taken into custody on charges related to fraud under specific economic crime regulations.
The multi-layered operation promised investors substantial profits through virtual asset trading and preyed primarily on middle-aged investors, promising high returns and life-changing opportunities.
As reported by Yonhap, the ringleader, known only as ‘Mr.A,’ allegedly spearheaded the operation by creating an extensive network of companies. Under his leadership, the organisation launched a portfolio of 28 cryptocurrency tokens, issued between December 2021 and March 2023.
South Korean authorities flagged the organisation’s suspicious activities in February last year. This led to Mr. A’s arrest after he fled to South Korea, Hong Kong, Singapore, and Australia.
Scammers listed six out of 28 tokens on various foreign exchanges to claim legitimacy. The remaining tokens were a dud with little or no value.
Investigators determined that these tokens had little to no intrinsic value, and in some cases, the fraudsters artificially inflated their value by manipulating trading prices.
To establish credibility, Mr. A and his co-conspirators reportedly used various means to lure in unsuspecting investors, including YouTube videos that reached hundreds of thousands of viewers. Mr A’s YouTube channel boasted over 620,000 subscribers and his persuasive lectures and promotional content further fueled the scheme’s success.
The group operated through a well-organised structure, comprised of six shell companies, ten sales fronts, and 15 intermediary organisations. Each was assigned a specific role, from coin issuance and database management to money laundering and asset sales.
The network allegedly employed sophisticated potential investors to purchase their coins using high-pressur e sales tactics.
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