The South Korean police recently arrested 215 individuals implicated in a virtual assets scam that fleeced approximately $232 million (325 billion won) from about 15,000 investors. Victims were entrapped by the scammers’ promise of a 20 times return on their principal investment.

Police have detained an unnamed social media influencer with more than 620,000 followers on YouTube, who is thought to be the mastermind, along with 12 others. According to a report, the police have charged the alleged mastermind and his co-conspirators with organizing, joining, or participating in a criminal organization.

Detailing the alleged crimes, the police said the offenses, committed between December 2021 and March 2023, saw the gang issue 28 different types of fraudulent digital assets. To execute the fraud, the Youtube influencer set up over 20 quasi-investment consulting firms and dummy corporations with roles ranging from coin issuance and price manipulation to money laundering.

Of the 28 digital assets issued to investors, six were created by the mastermind and were listed on overseas crypto exchanges. To spark interest in the assets, the YouTube influencer and his gang reportedly caused the value to spike through their own purchases. The report suggested that these were later dumped on unsuspecting investors at higher prices.

Commenting on the arrests, an unnamed Korean police official said:

Investment leading fraud crimes are becoming more organized and intelligent, producing many victims. If high returns are guaranteed through non-face-to-face investment recommendations, there is a high possibility that it is a scam, so please be especially careful.

According to the report, many of the victims were middle-aged and older Koreans who were convinced to invest their life savings. In some cases, victims even sold their apartments to raise the capital needed to invest.

Meanwhile, the Korean police said it has applied for pre-indictment confiscation and preservation of the $34.2 million that was recovered.

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