Three Individuals Sentenced for Orchestrating Crypto Investment Scam in South Korea
Three individuals have been handed prison sentences by a South Korean court for their involvement in an investment scheme that defrauded victims of approximately 610 million Korean won (equivalent to $416,000).
The Busan District Court Criminal Division 6 found the defendants guilty of violating the Act on the Aggravated Punishment of Specific Economic Crimes.
Busan Crypto Scammers Deceive Investors with False Promises
In June 2019, the trio operated an illegal crypto investment scheme in a building in Busan, where they lured investors with promises of trading around 1,000 high-quality coins from across the globe. They guaranteed investors monthly returns amounting to 30% of their initial investments.
The scammers claimed to have a proprietary trading algorithm that could generate profits by taking advantage of market fluctuations. However, this algorithm did not exist, and the funds raised were misappropriated for personal use. As a result, investors were defrauded of a total of 610 million won.
The court handed down a four-and-a-half-year prison sentence to the ringleader, while the other two accomplices received three and a half years and two years and six months, respectively.
During the sentencing, the presiding judge emphasized that the defendants exploited the public’s interest in cryptocurrency investments to deceive innocent individuals, undermining trust in the financial system and warranting severe punishment.
South Korea’s Crypto Boom Spurs Stricter Crackdown on Fraud
Recent data revealed that South Korea had approximately 16.29 million cryptocurrency investors in February, representing nearly 32% of the country’s population. The number of crypto investors has been steadily increasing, with significant growth observed in 2024.
A report indicated that 20% of South Korean public officials who disclosed their assets owned cryptocurrency, highlighting the widespread adoption of virtual assets in the country.
To combat the rising sophistication of virtual asset-related crimes, the Seoul Southern District Prosecutors’ Office established a dedicated unit, the Joint Investigation Unit for Virtual Asset Crimes, comprising 35 experienced professionals tasked with investigating crypto-related fraud cases.
Originally formed as a temporary task force in 2023, the unit has now been formalized to address the surge in crypto-related fraud cases in South Korea, aligning with the country’s efforts to ensure investor protection and market integrity in the cryptocurrency space.