Nineteen individuals have been apprehended by South Korean authorities in connection with a cryptocurrency fraud scheme that operated through a social media “crypto reading room.” The police believe that the international criminal organization utilized an “open chat room,” possibly a crypto Telegram group or a KakaoTalk open chat, to deceive investors with false crypto trading advice. As a result, the group managed to defraud 308 investors of approximately $18.8 million.
According to police spokespeople, some members of the gang posed as cryptocurrency experts within chat groups, while others pretended to be regular investors. These individuals allegedly professed to have earned significant profits by following the tips they gained from the “reading room.” The Daegu Police Agency’s criminal task force announced the arrests on May 21, but they suspect that at least six other suspects are still at large, likely residing overseas. The task force has requested Interpol to issue red notices for these individuals, enabling their arrest by foreign law enforcement upon identification.
The gang enticed potential victims by distributing invitation links to an open chat room. This room was populated by gang members who claimed to have achieved substantial profits by following the advice shared within. Police disclosed that the group attempted to persuade room members to download apps associated with cryptocurrency exchanges, where they could trade unlisted coins. To establish trust, the gang ensured that victims made moderate gains by investing small amounts of money into these allegedly fraudulent platforms. Consequently, many victims increased the value of their investments. However, when they attempted to withdraw their funds, gang members demanded payment for withdrawal fees. If victims refused to comply, the gang members would sever contact. The task force is currently working to locate the stolen funds.
Police reported that the gang’s leader employed coercive tactics, referred to as “pig-butchering,” to expand the organization’s size. The ringleader allegedly promised job opportunities in Myanmar to several individuals, but upon arrival, stole their passports and mobile phones, subsequently forcing them to join the criminal ring. Lawyer Kwak Joon-ho commented on the case, stating:
“Earlier this week, police in Gwangju arrested 28 people on suspicion of duping about 50 crypto-enthusiastic South Koreans out of $1.3 million.”
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