TLDR
South Korean CEO Byun Young-oh arrested for alleged $366 million crypto fraud
Scheme targeted elderly investors with promises of high returns on Ethereum
Over 500 victims affected, with an estimated 12,000 members in the scheme
Company Wacon operated unregistered crypto staking products
Investors unable to withdraw funds starting in mid-2023
South Korean authorities have arrested Byun Young-oh, the CEO of tech firm Wacon, for allegedly orchestrating a cryptocurrency fraud scheme worth approximately $366 million.
The scheme, which primarily targeted elderly investors, promised high returns on Ethereum investments but left many unable to access their funds.
Byun, along with his accomplice Yim Mo-Soo (also referred to as Yeom in some reports), face charges of fraud and fraudulent receipt of funds. The Seoul Central District Prosecutors’ Office is leading the investigation into the case, which has affected over 500 investors.
Wacon, a company with offices across South Korea, reportedly operated crypto staking products, including a wallet service called “MainEthernet,” without proper registration with financial regulators. The firm is suspected of running a Ponzi scheme with an estimated 12,000 members.
Crypto Chaos: Wacon CEO Nabbed for $366M Rug Pull!
Big news from Seoul as the Wacon CEO, Byun Young-oh, faces charges for running an epic Ethereum-themed scam worth $366 million.
The fraud reportedly ensnared 500+ investors, mostly boomers, promising 45% gains in a classic… pic.twitter.com/JEaxgo2DPs
— Mario Nawfal’s Roundtable (@RoundtableSpace) August 12, 2024
The scheme targeted mainly elderly people who were less informed about cryptocurrencies and Ponzi schemes.
Investors were offered attractive benefits, including promises of “100% interest” returns and profits through a “casino-AI platform and other services.” Wacon claimed to pay “30% on the 40th day and 7% on the 43rd day,” but failed to return investments last year.
Reports indicate that investors began experiencing difficulties withdrawing their funds in the summer of 2023. Despite these issues, Byun continued to assure investors until November 2023, when signs of the company’s collapse became evident. The MainEthernet office in Seoul’s Gangnam District removed its signage, raising suspicions among investors.
The investigation alleges that the company defrauded an estimated 500 investors of 54 billion won (approximately $39 million) and was responsible for the “fraudulent receipt of approximately 500 billion won” (around $365 million). Authorities define “pseudo-receipt” as a business that raises funds from an unspecified number of people with the promise of preserving the principal without proper licensing, registration, or notification under the law.
Wacon used a multi-level method to recruit investors, offering unlimited referral revenue for introducing new members to the company’s services. Throughout the police investigation, the company reportedly switched to new platforms several times, forcing investors to move their funds and recruit new subscribers.
South Korean police are continuing their search for additional victims and potential accomplices. They are also investigating Wacon’s parent company, SAK-3, for possible fraud. SAK-3’s Chairman, Kim Dae-chun, and six shareholders, including Byun, are suspected of orchestrating a similar scam. The investigation into SAK-3 estimates damages at 1 trillion won, which includes Wacon’s losses and money collected from other investors.
Byun has denied involvement in any Ponzi scheme, claiming ignorance of such structures. However, the evidence gathered by prosecutors has led to his indictment, and the case is expected to go to trial soon.
The post South Korean CEO Arrested in $366 Million Crypto Fraud Case appeared first on Blockonomi.
