The Daegu Police Agency in South Korea recently made several arrests and successfully dismantled a multi-level crypto fraud syndicate. This criminal organization is suspected of deceiving numerous victims into investing substantial amounts of money by falsely promising “high profits.” The perpetrators are believed to have established a questionable cryptocurrency via social networking service (SNS) reading rooms and multi-level companies between August 2020 and June 2021. Their scheme targeted over 4,000 victims.
On November 6, law enforcement authorities apprehended the suspects involved in this fraudulent operation and subsequently terminated their illegal activities.
Police Arrest 25 and Shut Down Operations
According to reports from local media outlets, an extensive investigation led to a manhunt and the subsequent arrest of 25 individuals believed to be at the core of a protracted $14 million cryptocurrency fraud scheme.
Among those arrested were a 47-year-old Chief Executive Officer (CEO) of a cryptocurrency issuance firm and a high-ranking officer from a multi-level company who were evidently deeply involved in the scheme.
The police assert that the suspects utilized partnerships with major corporations as a lure to entice victims into investing in cryptocurrencies through a domestic cryptocurrency exchange. After accumulating a significant sum of money, the suspects allegedly removed the exchange from operation.
Furthermore, law enforcement authorities allege that the suspects were engaged in a long-running price manipulation scheme within the exchange.
This type of crime often occurs as virtual currency issuing foundations and multi-level companies collude before listing. There is a possibility of price adjustments by certain forces even after listing, so be careful when investing,” a police officer stated.
Before the arrests, police partially recovered victims’ funds and vowed to intensify investigations.
Partial Recovery and Further Investigations
The Daegu Police Agency has reported that they managed to recover 9.5 billion won, equivalent to approximately $7.2 million, before formally indicting the 25 suspects.
In the wake of these arrests, the police are poised to broaden their investigations to uncover additional crimes that transpired in relation to the listing and delisting of the domestic cryptocurrency exchange involved. This expanded probe will focus on the exchange’s executives, and it is anticipated to lead to prosecutions on charges of quasi-receipt and aiding and abetting fraud.
