A South Korean CEO of a tech firm has been arrested for allegedly orchestrating an Ethereum-themed cryptocurrency fraud scheme that defrauded around 500 victims. The CEO, surnamed Byun, of the company Wacon, has been remanded in custody and will face trial. Byun was arrested alongside another accomplice named Yeom, and they are facing charges of fraud. The victims of the scheme were primarily elderly citizens, and prosecutors claim that Byun set up a Ponzi-style pyramid scheme through Wacon’s wallet service named MainEthernet. Reports began circulating in the summer of 2023 that investors were unable to withdraw their funds from the platform, leading to the investigation and subsequent arrest of Byun and Yeom.
Wacon operated a wallet service called MainEthernet where investors’ funds were held, and Byun met with investors in November 2023, promising to refund their investments and resolve the situation within four months. However, prosecution officials believe Byun orchestrated a multi-level marketing fraud scheme worth hundreds of billions. Byun and Yeom allegedly attracted investors by promising to pay interest on crypto deposits made into the firm’s wallets. The investigations are ongoing to determine if there are additional victims or accomplices involved in the scheme, and Byun has refuted accusations of running a Ponzi scheme, claiming ignorance of its structure and also mentioning operating a crypto exchange and NFT-based gaming business.
Previous reports suggested that around 12,000 people may have invested in Wacon, with the majority of investors being aged 60 or above. The scheme targeted elderly citizens, promising high returns on their investments, with reports indicating that some investors were promised profits of 45% to 50% on their stakes. Byun’s denial of running a Ponzi scheme and his claims of operating other crypto-related businesses raise questions about the extent of the fraudulent activities and the scope of the investigation. The case highlights the vulnerability of investors, especially elderly citizens, to such fraudulent schemes and the need for increased awareness and protection measures in the cryptocurrency industry.
In May, there were reports of scammers targeting Ethereum investors in South Korea, claiming that their tokens would be “burned” if they did not take action. This incident adds to the concerns surrounding cryptocurrency fraud and the need for regulatory vigilance to protect investors from falling victim to such schemes. The case of the South Korean CEO and the alleged fraud scheme further underscores the importance of due diligence and caution in the cryptocurrency market, emphasizing the risks associated with unregulated platforms and promises of high returns. The authorities are continuing their investigation into the matter, aiming to uncover the full extent of the fraudulent activities and bring justice to the victims who fell prey to the scam.
