Nineteen individuals have been apprehended by South Korean authorities in connection with a cryptocurrency fraud scheme conducted through a social media “crypto reading room.” The police believe that the international criminal organization operated an “open chat room,” possibly a crypto Telegram group or a KakaoTalk open chat, where they posed as legitimate crypto trading experts. However, instead of providing genuine trading advice, the group defrauded 308 investors out of approximately $18.8 million.
According to police spokespersons, certain members of the gang presented themselves as crypto professionals in chat groups, while others pretended to be regular investors. These members claimed to have earned profits by following tips they acquired in the “reading room.” On May 21, the Daegu Police Agency’s criminal task force, as reported by Global Kyungjae Shinmun, announced the arrests, but they believe that at least six suspects are still at large and currently overseas. Consequently, the task force has requested Interpol to issue red notices for these individuals, which would enable their immediate arrest by foreign law enforcement agencies.
The group enticed potential victims by sending out invitation links to an “open chat room.” Within this room, gang members falsely boasted about their significant profits from following the advice posted there. Furthermore, the gang attempted to persuade room members to download apps associated with crypto exchanges, where they could trade unlisted coins. To gain the trust of potential victims, the group ensured that they made modest gains when investing small sums of money on these alleged fraudulent platforms. As a result, victims were convinced to increase the value of their investments. However, when victims attempted to withdraw funds from the platforms, gang members demanded “withdrawal fees.” If victims refused to comply, the gang members would sever all contact. The task force is currently attempting to trace and recover the stolen funds.
Police authorities revealed that the gang’s leader implemented a recruitment strategy referred to as “pig-butchering” to expand the organization’s size. The ringleader promised multiple individuals employment in Myanmar, but upon arrival in the country, the ringleader allegedly stole their passports and cell phones, forcing them to join the criminal ring. Lawyer Kwak Joon-ho commented on the matter, stating that earlier this week, police in Gwangju detained 28 individuals suspected of defrauding around 50 cryptocurrency enthusiasts in South Korea out of $1.3 million.
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