South Korean prosecutors have charged an unnamed man in his forties, accusing him of orchestrating a $1.3 million crypto mining-themed scam. The individual allegedly lured investors with promises of guaranteed monthly returns ranging from 3% to 8%, amassing significant funds through fraudulent means. The scam targeted at least nine investors and raised over $4.1 million in total, with the prosecutors labeling the operation as a Ponzi scheme.
The suspect, whose identity remains undisclosed, is a male in his forties. He is accused of embezzling $1.3 million from one investor and gathering over $4.1 million in contributions from at least nine individuals. The charges against him include fraud and violations of South Korea’s quasi-investment advisory services-related laws.
The fraudulent activities occurred between September 2021 and August 2023. The Seoul Western District Prosecutors’ Office has formally charged the man with violating the Specific Economic Crimes Act, among other offenses.
The man allegedly used Ponzi methods, paying earlier investors with funds from newer investors, without engaging in any actual cryptocurrency-related business. The investigation was triggered by a complaint from an investor, which led officials to uncover numerous similar cases. Prosecutors examined the suspect’s bank accounts and found evidence of large sums of money being repeatedly deposited and withdrawn, prompting them to file for an arrest warrant.
Crypto mining-related fraud has become increasingly prevalent in South Korea, driven by high electricity costs that limit legitimate domestic mining operations. Scammers often entice investors with opportunities to participate in overseas mining projects in countries like Kazakhstan, promising high returns. Recently, police in Incheon dismantled a suspected fake Cardano (ADA) mining ring that allegedly deceived around 70 individuals. These scams are typically promoted in open KakaoTalk and Telegram crypto chat rooms, as well as on dating apps.
Prosecutors aim to act swiftly to prevent further harm from similar scams. A spokesperson emphasized their commitment to ensuring the defendant faces a punishment commensurate with the crime’s severity. This case underscores the growing issue of crypto-related fraud in South Korea and highlights the need for heightened awareness and caution among investors. As the popularity of cryptocurrencies continues to grow, so too does the risk of fraudulent schemes promising unrealistic returns.
