A multi-level pyramid scheme with up to 16 per cent interest per day: South Korea smashes a multi-million crypto fraud ring.
The larger fraud operation was carried out by two perpetrators between 2020 and 2021. They sold "digital fashion" on an online P2P marketplace. This included "virtual" clothes as well as traditional Korean and Japanese clothes, including hanbok and kimono pieces. The platform also included its own cryptocurrency.
In the process, the fraudsters collected 333 million US dollars from 435 victims. The operators created a multi-level "pyramid scheme" to attract new "members" to the "marketplace". They were promised high interest rates in return - up to 16 per cent per day.
Crypto fraud on the rise in South Korea
The South Korean government declared the fight against crypto-crime one of its top priorities for 2023, introducing the "Virtual Currency Tracking System" to crack down on money laundering with cryptocurrencies. In 2022, citizens in South Korea transacted around 5.6 trillion Korean won (US$4.3 billion) through "illegal" crypto exchanges, according to Cointelegraph.
South Korea is also home to the notorious crypto fraudster Do Kwon. He was arrested by Interpol in March 2023. The authorities are investigating the founder of Terra Luna. The crypto ecosystem collapsed last year. The damage: around 40 billion US dollars. The crash was one of the catalysts for the current bear market.
