South Korean Fraudsters Indicted for $22.7 Million Crypto Scam

South Korean Fraudsters Indicted for $22.7 Million Crypto Scam

South Korean prosecutors have charged a group of alleged cryptocurrency fraudsters who impersonated regulatory officials to defraud victims of approximately $22.7 million. According to reports from Money Today, the scheme was led by four men in their 40s who created fake trading platforms named BISSNEX and BDCDP, posing as legitimate stock and cryptocurrency exchanges.

The suspects reportedly targeted anxious users of these platforms, convincing them to transfer $5,000 in the stablecoin USDT. Utilizing sophisticated tactics, the group established YouTube channels and operated a Naver Band chat group, a popular communication app in South Korea, to attract potential victims.

Once users engaged with these platforms, the fraudsters allegedly sent out counterfeit letters designed to appear as if they were approved by the Financial Supervisory Service (FSS). These letters, which included the FSS's official seal and the logo of the Korean National Police Agency, claimed that investigations were underway regarding crypto-related fraud involving BISSNEX and a specific individual.

The misleading letters stated that since November of the previous year, this individual had invited numerous BISSNEX investors to open crypto asset trading accounts, supposedly collaborating with FSS employees to steal crucial transaction information. BISSNEX asserted that this person had conducted illegal financial activities on its platform and had defrauded users.

The letter warned users of ongoing investigations by both the police and the FSS and suggested that BISSNEX would conduct its own inquiry to protect its clients' interests. To facilitate this, the platform requested a "refundable" deposit of $5,000 in USDT from its clients, promising reimbursement once their investigation concluded.

This pattern of fraudulent activity is not new in South Korea's crypto landscape. Law enforcement officials noted that similar tactics have been employed by other fraudsters who set up fake exchanges, claim to freeze wallets, and pose as regulatory authorities demanding investigation fees in cryptocurrency.

Prosecutors revealed that the indicted individuals had also impersonated legitimate stock market firms such as Shinyoung Securities and DB Financial Investment. They used fake bank records and shared images of cash bags on their Band channel to further deceive investors. Authorities have stated that the ongoing investigation may uncover additional victims and higher financial losses.

Legal experts have called for stricter regulations concerning chat app-based cryptocurrency groups to combat such fraud. Suwon-based prosecutors are continuing their investigation into the case, with the possibility of further charges emerging.