$333 million fraud: South Korea tackles crypto crime

South Korean police are dismantling a major crypto crime ring. This reported Cryptonews on May 30, 2023. Total value of the scam: $333 million. Hundreds of victims were reportedly affected.

The larger fraud operation was carried out between 2020 and 2021 by two perpetrators. They sold "digital clothing" on an online P2P marketplace. This included "virtual" dresses, as well as traditional Korean and Japanese clothing, including hanbok and kimono pieces. The platform also included a proprietary cryptocurrency.

The scammers raised $333 million from 435 victims. The operators created a multi-level "pyramid system" to attract new "members" to the "marketplace." In return, they were promised high interest rates - up to 16 percent per day.

Crypto scams increase in South Korea

The South Korean government has made fighting cryptocurrency crimes one of its top priorities for 2023. It launched the "Virtual Currency Tracking System" to combat cryptocurrency money laundering. In 2022, South Koreans turned over 5.6 trillion Korean won ($4.3 billion) on "illegal" crypto exchanges, according to Cointelegraph.

South Korea is also home to well-known crypto scammer Do Kwon. He was arrested by Interpol in March 2023. Authorities are investigating the founder of Terra Luna. The crypto ecosystem collapsed last year. The damage: about $40 billion. The crash was one of the catalysts for the current bear market.