South Korean prosecutors have charged an unnamed individual whom they suspect of orchestrating a $1.3 million crypto mining-themed “scam.”
Prosecutors believe that the individual pledged investors “guaranteed” monthly returns of 3% to 8% on their stakes, according to Asia Kyungjae.
The individual is supposedly responsible for the theft of $1.3 million in “investment funds” from one of the alleged victims.
The individual is believed to have collected over $4.1 million in “capital contributions” from a minimum of nine investors, according to investigators.
The $1.8 million “embezzlement” is considered fraud by the prosecutors. They have also filed accusations in accordance with the nation’s quasi-investment advisory services-related laws.
The individual was accused by the Seoul Western District Prosecutors’ Office with violating the Specific Economic Crimes Act, in addition to other offenses.
According to officials, the “scam” employed Ponzi methods, which involved making payments to elder investors using the funds of newer investors.
The prosecution claimed that the individual had not engaged in any cryptocurrency-related enterprise. It seems that the investigation was initiated by an investor who submitted a complaint. This, in turn, appears to have initiated an official investigation that has revealed numerous instances of similarity.
According to officials, they conducted an investigation into the suspect’s bank accounts and discovered evidence of “repeated deposits and withdrawals of substantial sums of money.”
In recent years, there has been an increase in the number of fraud cases associated with crypto mining in South Korea.
The low number of South Korean enterprises that indulge in industrial-scale domestic crypto mining operations is a result of the high cost of electricity.
However, the police have issued a warning regarding an increase in schemes in which “investors” are urged to participate in crypto mining projects operating overseas, such as those in Kazakhstan.
Typically, victims are assured that they will receive “guaranteed” monthly returns on their investments. Scammers claim that larger stakes will result in greater returns.
Last month, police in Incheon conducted an operation against a suspected fraudulent Cardano (ADA) mining organization that they believe deceived approximately 70 individuals across the country.
According to the police, these fraudsters are notably active in open crypto conversation rooms on Telegram and KakaoTalk. Detectives have cautioned that they also conduct victim searches on dating applications.
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