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Tim Alper
Tim Alper
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Prosecution officials have indicted six people, including a practicing South Korean lawyer, as part of an investigation into a suspected $7.9 million crypto scam.
Per the media outlet KBC News, the Seoul Northern District Prosecutors’ Office has charged six people with issuing and selling so-called “scam coins” from May to August 2022.
South Korean Lawyer Faces ‘Scam Coin’ Wrap
Prosecutors say that the group duped a total of 1,036 investors out of their money by promoting their alleged scams on YouTube and other platforms.
The group will be tried on charges of organizing a criminal organization and committing fraud. All six suspects were released without detention pending a trial date.
The prosecution has not revealed the names of the coins in question. But it claimed that the group “listed the coins on overseas crypto exchanges with less stringent listing requirements” than domestic platforms.
The group then allegedly “promoted the coins” on “social media reading rooms.”
‘Reading Room Crypto Scams’ – on the Rise?
In the South Korean internet space, “reading room” predominately refers to crypto and stocks-themed open chat rooms on platforms like KakaoTalk and Telegram.
Cryptonews.com has visited a large number of these rooms in recent months.
While most larger communities are mainly full of investors in large-cap tokens like Bitcoin (BTC), Cryptonews.com has also seen smaller chat rooms populated by what appear to be scammers trying to lure victims into crypto mining-related scams.
Others appear to have been set up to promote seemingly non-existent coins.
The prosecution service said the suspects bragged to investors about the “imminent listing prospects of the coins they promoted.”
They suggested it would not be long until the coins “were listed on major domestic exchanges.”
However, the prosecution officials said the group “had no intention of conducting any sort of bona fide crypto business from the outset.”
Instead, the prosecutors claimed, the group “immediately laundered” their proceeds “into cash” by using a “bogus” gift certificate company.
The gang then “used the money” to “buy foreign cars or pay for entertainment,” prosecutors said.
Lawyer ‘Posed as YouTube Crypto Expert’
Prosecutors added that the South Korean lawyer posed as a “crypto expert” on YouTube, and “led the money laundering operation.”
The investigators claimed this lawyer also helped draw up “false contracts” to help cover the group’s tracks.
Police began investigating the group in 2023 and handed the case over to the prosecution in November of the same year.
The prosecution service said it had since “expanded the investigation” by “tracking” accounts and crypto wallets.
The service has since “conducted searches” and seized funds, finally “revealing the existence of a crypto scam-type criminal group.”
Scam Coin Scrutiny
So-called scam coins have fallen into the spotlight in South Korea in recent months. Several high-profile cases some including A-listing celebrities have come to light, with politicians vowing to take action against issuers.
Another high-profile scam coin-related probe has unearthed what prosecutors say is evidence of crypto fraud worth almost $60 million.
Late last year, detectives arrested a group of suspected crypto scammers after one of their number reportedly accidentally targeted a police officer.
