South Korea is following the footsteps of the global community in the cryptocurrency crackdown. Seven arrested in $38m South Korean Bitcoin Ponzi scheme that preyed on middle-aged investors.
23 November, AtoZForex – A group of seven people in South Korea was arrested for operating a Bitcoin Ponzi scheme, targeting middle-aged investors who were innocent about the cryptocurrency market.
$38m South Korean Bitcoin Ponzi scheme
As per the allegations, the scam, which ran from 2015, ended up with 3,900 investors losing $38 million among them. The scam group lured middle-aged victims into the scheme by promising them a payout of 180 percent in profit on a regular basis.
The investors were convinced about the investment which promised them a 200 percent profit in the short term. However, the scammers didn’t invest those funds into Bitcoin but into the Ponzi scheme they were running.
The group was running the scheme under the unlicensed “Bitcoin Investment Firm” in Gangnam in Seoul, alluring investors by promising outsized returns. Since then, the scammers targeted gullible middle-aged investors and made a profit to the tune of $38 million in less than two years.
Ponzi scheme shut down
The police in Jeonbuk Iksan arrested the group on several charges after several investors complained about their scam and their loss in the investment. The investors also claimed that fraudsters illegally obtained $4.1 million funds to establish the Bitcoin Investment Firm.
After the arrest, the authorities shut down the Ponzi scheme. During interrogation, the operator of the scheme said they never intended to run a scam at the beginning. But, as the business grew, they decided to dupe the investors.
Meanwhile, South Korea has continuously cracked down on bitcoin and cryptocurrency-related Ponzi schemes, scams, and fraudulent operations. In July, South Korea has officially provided a regulatory framework for cryptocurrency startups. This legalized Bitcoin service providers to facilitate payments, transfers, and trades. The authorities have informed the public about their intentions to review the regulatory rules for cryptocurrencies. The Representative of the leading Democratic Party of South Korea, Park Yong-Jin, had announced the decision. Also, he had revised the three regulatory bills.
Think we missed something? Share your opinion with us in the comments section below.