A South Korean financial YouTuber is accused of leading a $232 million cryptocurrency scam that led to the arrest of 215 people.
South Korea has uncovered a cryptocurrency scam worth $232.7 million (325.6 billion won), affecting more than 15,304 victims. The scam lasted from December 2021 to March 2023, centered in South Gyeonggi Province, a suburb of Seoul.
The ringleader was identified as Mr. A, a famous YouTuber with 620,000 followers and the leader of an investment consulting company. Mr. A initially worked in the field of stock consulting, but due to failure in investment recommendations and pressure from customers demanding refunds in 2020, Mr. A switched to the cryptocurrency field. From here, Mr. A and his accomplices set up a network of fake companies to organize large-scale fraud.
Organizational chart of Mr. A's fraudulent companies. Source: Yonhap
The group called for investment in 28 different cryptocurrencies, of which 6 were issued by the group itself and manipulated the market, the rest were little-known, low-value coins. Using a YouTube channel and targeted ads, Mr. A reached more than 9 million phone numbers, mainly targeting middle-aged and elderly people. The group even impersonated employees of the Financial Supervisory Authority to gain trust, convincing victims to spend up to 854,000 USD on the investment program, not hesitating to encourage them to sell their houses to participate.
After the incident was discovered, Mr. A tried to flee to Australia but has now been arrested. Police have recovered 22 Bitcoins from Mr. A and are seeking to seize an additional $34 million from related accounts.
Of the 215 people arrested, 12, including Mr. A, are currently in custody. According to Yonhap news agency, this is the largest cryptocurrency scam in South Korea's history, and has raised alarm bells about the increasingly complex scams in the cryptocurrency sector, especially those facilitated by influencers.
In response to this development, the South Korean government is stepping up its monitoring of cryptocurrency transactions to detect and prevent suspicious activities in a timely manner. Severe penalties, including life imprisonment, are being applied to deter violations in the industry.