South Korean Busts $32M Crypto Scam By Alleged Gang


South Korean law enforcement recently cracked down on a $32 million chat app-based cryptocurrency scam allegedly orchestrated by a network described as “gangsters.” This operation, reportedly run through fake “crypto reading rooms” on popular chat app platforms, involved a total of nine groups of individuals identified as “violent gangsters” by the Busan Metropolitan Police.

Authorities managed to arrest eight individuals suspected of spearheading these fraudulent “reading rooms” and rounded up 79 others deemed as “accomplices” in this elaborate scheme. Shockingly, the group successfully persuaded 572 people across the country to invest their money in the scam.

The modus operandi of the gang involved setting up deceptive online crypto platforms, recruiting investors, overseeing bank accounts, and executing money laundering activities, according to police statements. Intriguingly, all members of the group fell within the age brackets of millennials and Generation Z.

In a coordinated series of raids conducted nationwide, law enforcement confiscated various assets including cash, motor vehicles, and other valuables, cumulatively amounting to $1.9 million.

Scammers’ Target: South Korean Chat App Users

While South Korea has witnessed the proliferation of crypto-themed “reading rooms” on platforms like KakaoTalk, intended for legitimate crypto trading discussions, a darker trend has emerged. Certain chat rooms have become a breeding ground for opportunistic crypto scammers preying on unsuspecting users.

Instances of these Kakao chat rooms promoting suspicious coins and dubious crypto mining “investment” schemes promising assured profits have come to light. The “gangsters” behind the recent $32 million scam apparently launched their operations in February 2022, masquerading as investment experts offering significant returns through crypto, unlisted stocks, gold, and overseas futures investments.

The fraudulent scheme involved false claims of guaranteed profits and reassurances to potential victims about the safety of their investments. Moreover, investigators suspect that the gang purchased personal data from dark web vendors to customize their approach, targeting victims through personalized text messages and emails.

In a separate legal development in Gwangju, an individual faces prosecution for allegedly defrauding more than a dozen investors out of $2.1 million through an altcoin scam.