Crypto Fraud Scheme Grows from 3.5 Billion Won to 37 Billion Won After Prosecution Investigation

The prosecution has arrested and indicted the ringleaders of a multi-level cryptocurrency investment fraud scheme involving 37 billion won.

The Ansan Branch of the Suwon District Prosecutors Office announced today (July 13) that it has indicted three individuals, including the CEO of a crypto business identified as A, on charges including fraud under the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, violations of the Act on Prohibition of Private Lending and Similar Businesses, and violations of the Door-to-Door Sales Act.

A and the others are accused of swindling approximately 5.1 billion won from 132 victims and collecting a total of 37 billion won in investment funds in cash and Tether (USDT) between February 2022 and April 2023 by falsely promising guaranteed principal and high returns.

Investigations revealed that the group deceived victims by listing their cryptocurrency on overseas exchanges and artificially inflating trading volume and prices using market manipulation software.

A is also accused of concealing 6 billion won worth of Tether by transferring it to anonymous cryptocurrency wallets outside of the exchanges.

An accomplice, B, who acted as the group's financial manager, was found to have concealed 12.8 billion won in cash through borrowed-name accounts and laundered 9 billion won of that amount through a process known as gift certificate cashing.

Previously, in April 2024, the police had referred the case to the prosecution without detention, citing fraud and illegal deposit-taking charges involving only 3.5 billion won.

Considering the severity of the crime, the prosecution switched to a detention investigation and requested supplementary investigations three times, aiming to secure data from overseas exchanges to identify the full extent of the criminal proceeds.

However, in July of last year, the police returned the same results as the initial investigation. The prosecution then launched its own direct investigation, identifying the anonymous cryptocurrency wallets used by A and others, and successfully secured records of 24 billion won in transactions and money laundering.

Following this, the prosecution obtained arrest warrants for the three individuals from the court last month and indicted them while in custody.

The prosecution stated, "We have identified approximately 13 billion won in criminal proceeds acquired by the defendants and have taken measures to preserve the assets for forfeiture before trial," adding, "We will maintain a thorough prosecution to ensure that sentences commensurate with their crimes are handed down."

(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.