South Korea arrests 215 individuals in $232 million crypto fraud scheme

South Korea has arrested 215 individuals linked to a massive cryptocurrency investment scam ring that defrauded tens of thousands of victims, causing losses exceeding 325 billion Korean won ($232 million).

The Gyeonggi Southern Provincial Police Agency's economic crimes investigation unit announced today that it has specified 12 core members out of the arrested 215 members of the scam ring. The key figures have been detained and sent to prosecution, the release said.

Twelve key members include the suspected ringleader, who operates a YouTube channel with over 620,000 subscribers, and other executive members of the organization responsible for token price manipulation, money laundering, and other crimes, according to the South Korean police.

The scam took place between December 2021 and March 2023. It lured investors with a “private sale” based on “advanced information” on unlisted cryptocurrencies that guarantee high returns, selling 28 different kinds of fraudulent crypto tokens to defraud $232 million.

Six of the 28 cryptocurrencies were self-issued by the crime ring as directed by the suspected ringleader. They were then listed on foreign exchanges via brokers and had their prices manipulated by paid market-making teams.

Hired salespersons, disguised as professional traders, advised innocent investors to “sell their apartments” and invest everything they had into the scam tokens for a “chance to change their destiny,” the press release said.

The ringleader, only identified by the South Korean police as “A,” had escaped to Australia via Hong Kong and Singapore before being arrested. South Korean authorities and media typically conceal the identities of suspects for privacy reasons.

The Gyeonggi police agency said it has requested court approval to seize around $34 million they discovered via the arrest, including 22 bitcoins the ringleader held in a hard wallet.