South Korea Dismantles $24 Million Bitcoin Pyramid Scheme
A South Korean court has fined two individuals found guilty of operating a bitcoin pyramid scheme that amassed over 26 billion won, approx. $24 million, from investors.
In a ruling on April 19, Judge Hwang Jin-jin of the Incheon District Court in Korea issued sentences in fines of $15 million and $8 million for two unnamed individuals found to operate a pyramid scheme that raked in 16 billion won and 10.6 billion, respectively.
According to Korean news agency Yonhap, the first individual – who faces the higher fine – is seen as the mastermind of the multi-level investment scheme based out of the Philippines that promised investors high returns through purported investments in bitcoin. The other individual, who served as chairman of the company managing the investments, is currently on the run with Interpol engaging in an active search for the fraudster.
In roughly translated statements, Judge Hwang reportedly said in a ruling:
The multi-level transactions is a risk to disturb the socio-economic order and mass production of many victims.
The “considerably large” fines were based on the volume of investment poured into the fraud by many victims, the judge added.
Cryptocurrency-related fraud continues to be prevalent in eastern Asia with scammers offering unrealistically high short-term returns by claiming to invest in cryptocurrencies to justify heightened earnings.
This month alone, law enforcement authorities and regulators from Vietnam, China, and the Philippines have cracked down on Ponzi schemes and warned the public against investments in multi-level schemes.
Vietnam, in particular, saw an unprecedented $660 million ICO-related fraud that conned over 30,000 investors across the country.
Earlier this week, Chinese police arrested multiple individuals operating a nationwide cryptocurrency pyramid scheme that saw over 13,000 participating ‘investors’ contribute a total of 80 million yuan ($13 million).
In a notice on Wednesday, the Philippines’ securities regulator published a list of fourteen online cryptocurrency investment schemes, urging the public against any participation while warning operators of significant fines and criminal prosecution that includes sentencing of 21 years in prison.
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