Thailand police dismantles a crypto scam ring targeting Koreans

Thailand authorities have dismantled a crypto scam ring that stole over $15.1 million from 878 Korean victims through systematic multi-method scams.

The Seoul Metropolitan Police Economic Crime Investigation Division announced the arrest of 25 members of “Lungo Company,” which operated from a resort in Pattaya, Thailand.

Multi-method crypto scam targets 878 Korean victims

Lungo Company was a criminal group from July 2022 until July 2023 when it swindled 21 billion won ($15.1 million) with well-organized schemes of fraud. The group split into special teams, which dealt with various methods of scams unlike the usual rings, which deal with a single approach. Police officers indicated that the strategy stood out from the previously used schemes by the criminals.

The romance scamming group stole photos and used them to create fictitious profiles for social media sites and disguised themselves as potential love interests. The victims were slowly persuaded into investing money into fake sites after forming attachments.

Yet another expert team used a stolen database from a lottery number suggestion portal to attack chosen victims. The hackers approached victims posing as those providing refunds or compensation for the leakage of personal data from the exploited platform. The victims were thus lured into buying bogus cryptocurrency during the fake compensation transaction.

The group also operated fake reservation scams and impersonated public institutions to trick victims into financial transfers. Each team maintained detailed victim profiles and communication logs to coordinate their deception efforts.

The leaders maintained strict discipline for all members by taking away passports and imposing communication restriction. The members were not allowed to exit the Pattaya resort facility as telephones were also strictly monitored.

Advanced money laundering techniques exploit cross-chain networks

Crypto security expert analysis reveals the Lungo Company used “multi-layered laundering” techniques to hide stolen funds. The organization likely used chain-hopping tactics to quickly swap funds across different blockchains to complicate transaction tracking. Cross-chain crime has tripled globally in the past two years through decentralized exchange exploitation.

The criminals exploited nested services within regulated exchanges and operated unauthorized trading platforms that hide connections to legitimate infrastructure. These “parasite exchanges” process nearly 100 times more illicit volume than their host platforms while charging premium fees between 7% and 15% for anonymity services. Shell companies opened accounts across multiple major exchanges using fraudulent credentials.

Chain-swapping techniques forced investigators to spend extensive time manually tracing funds across multiple protocols and networks. The organization converted various cryptocurrencies across different blockchain networks to break audit trails. No-KYC coin swap services and cross-chain bridges facilitated rapid anonymous transfers throughout the laundering process.

Money laundering operations likely included crypto-funded prepaid cards for ATM withdrawals and casino laundering to produce legitimate-appearing winnings. Micro-transactions were split into thousands of small transfers to stay below automated detection thresholds.

Final cash-out procedures almost certainly involved unregulated over-the-counter brokers in Thailand and neighboring jurisdictions. These services provided high-volume cash conversion with minimal regulatory scrutiny. Coordination occurred through encrypted messaging applications like Telegram and WeChat to avoid law enforcement monitoring.

International cooperation leads to arrests and extradition efforts

Thailand police raided the first resort back in June and detained a few suspects prior to the joint operations with Seoul police widening the scope of investigation. The ringleader and eight central members are currently detained in Thai custody as South Korea seeks their extradition via diplomatic means. The vast majority of the suspects transferred to Korea beforehand are detained and actively investigated.

Yim Jung-wan, lead of the second economic crime investigation unit, also verified investigators are looking into links between the ringleader and other fraud rings. The case illustrates increasing transnational cooperation against cross-border crypto crime as customary jurisdictional limits matter less. The Thai and Korean law enforcement agencies exchanged intelligence and coordinated arrest operations in more than one spot.

The investigation comes days after a Seoul police sting last month busted a multinational cybercrime syndicate accused of robbing $28.1 million from wealthy Koreans. That racket had victimized high-profile targets including BTS sensation Jungkook and other top corporate bigwigs by stealing from financial accounts.

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