South Korea Busts Crypto Scam: 19 Arrested In ‘Reading Room’ Fraud

Source Bitcoinist
May 25, 2024 15:00

South Korean law enforcement has struck a blow against social media-fueled crypto scam with the arrest of 19 individuals linked to a deceptive “crypto reading room.” The Daegu Police Agency’s raid, which unfolded on May 21st, exposed a manipulative scheme that preyed on more than 300 unsuspecting investors, swindling them out of a staggering $19 million.

Crypto Scam: Deceptive Chats, Illusory Profits

Authorities allege the international gang operated an “open chat room,” likely on platforms like Telegram or KakaoTalk, masquerading as a legitimate hub for cryptocurrency trading advice.

Police describe the room as a meticulously crafted stage. Gang members, posing as seasoned crypto experts, dispensed seemingly valuable tips and boasted about substantial returns.

Others, acting as ordinary investors, chimed in with enthusiastic endorsements, weaving a web of trust to lure victims into the trap.

Bogus Exchanges, Brutal Betrayal

The meticulously crafted facade unraveled when victims were steered towards downloading apps connected to bogus crypto exchanges. These fake platforms, say officers, housed unlisted coins, further fueling the illusion of exclusivity and potential profit.

To solidify trust, the crypto scam gang allowed victims to make small, initial gains, emboldening them to invest larger sums. The true horror unfolded when victims attempted to withdraw their funds. They were met with a seemingly insurmountable obstacle – fabricated “withdrawal fees.”

Refusal to pay these fees resulted in the gang severing all communication, leaving victims with nothing but empty promises and stolen savings.

Pig-Butchering Abroad: A Chilling Twist

The investigation revealed a particularly disturbing recruitment tactic employed by the ringleader. Dubbed “pig-butchering,” it involved promising unsuspecting individuals lucrative job opportunities in Myanmar.

Upon arrival, a sinister bait-and-switch unfolded. Passports and phones were confiscated, and victims were strong-armed into joining the fraudulent operation. This tactic highlights the international reach of these criminal networks and the lengths they go to exploit vulnerabilities.

Crypto Wild West: A Call for Regulation

This raid underscores the urgent need for stricter regulations in the cryptocurrency space. South Korea, a hotbed for crypto activity, has seen a surge in social media-driven scams.

Experts believe this case may be a catalyst for the government to implement stricter controls on both crypto platforms and social media groups offering investment advice.

Featured image from Pacific Standard, chart from TradingView

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