A group that defrauded over 1,400 people by claiming to generate daily revenue of 2% from transactions linked to Bitcoin and U.S. dollars has been apprehended by the police. Many of the victims were aged between 50 and 70 and were not well-versed in virtual assets.
The Seoul Metropolitan Police Agency's criminal mobile unit announced on the 24th that they had uncovered a fraudulent investment organization involved in "virtual asset block deal swap transactions." A total of 18 individuals, including a man in his 50s, identified as A, who was the mastermind, were apprehended on charges of fraud under the Act on the Aggravated Punishment of Specific Economic Crimes, violations of the Act on the Regulation of Similar Receiving Activities, and violations relating to door-to-door sales. The mastermind A and another man in his 50s, B, who played the role of recruitment mastermind, were detained, while 16 others were sent to prosecutors without detention.
They established 226 centers across the country, including Seoul, Daegu, and Busan, without proper licensing or registration for multi-level marketing. From December 2023 to July of last year, they recruited investors by promoting a non-existent business claiming to mediate "block deal swap transactions" involving large-scale exchanges of Bitcoin (BTC) and Tether (USDT) outside of virtual asset exchanges.
The organization collected 144 billion won by promoting the guarantee of the principal with 2% daily revenue to investors and offering additional bonuses for recruiting subordinate investors. In reality, it was a typical multi-level fraud where the revenue paid to earlier investors was sourced from the investment funds of later investors.
Police determined that they defrauded 32.8 billion won from the 144 billion won received. Mastermind A also withdrew 18.5 billion won in checks from the investment funds for personal gain. Police have seized and preserved approximately 6.5 billion won of the criminal proceeds prior to prosecution.
The total number of victims in this case reached 1,408, with 600 individuals aged in their 60s (42.6%) being the most numerous, followed by those in their 50s (369 individuals, 26.2%) and those in their 70s (239 individuals, 17.0%). There were also 2 individuals in their 90s. Police noted, "We targeted the majority of victims in their 50s to 70s by taking advantage of their lack of knowledge about virtual assets."