South Korean police have made 19 arrests in connection with a fraud case involving a social media “crypto reading room.” The international gang behind the scam allegedly operated an open chat room, posing as crypto experts and ordinary investors, in order to defraud 308 investors out of $18.8 million. The gang lured victims into the chat room by claiming to offer profitable trading tips and then encouraged them to download apps connected to bogus crypto exchanges to invest in unlisted coins.
The Daegu Police Agency’s criminal task force announced the arrests on May 21, but suspects are still at large. Six individuals are believed to be overseas, and Interpol has been asked to issue red notices for their arrest. The gang used tactics such as promising employment in Myanmar, stealing passports and cell phones, and forcing individuals to join the ring. The lawyer Kwak Joon-ho stated that there has been an increase in fraudulent schemes using open chat rooms, and perpetrators could face fraud and organized crime charges.
The gang attempted to build trust with potential victims by ensuring they made minimal gains when investing small amounts of money in the bogus platforms. However, when victims tried to make withdrawals, they were told to pay withdrawal fees. If they refused, the gang members would cut off contact. The task force is working to locate the stolen funds and bring the remaining suspects to justice. The gang’s recruitment tactics, known as “pig-butchering,” involved promising employment in Myanmar, stealing personal belongings, and coercing individuals to join the ring.
In a separate case, police in Gwangju arrested 28 individuals for allegedly defrauding 50 South Korean investors of $1.3 million. The rise in fraudulent schemes using open chat rooms, including reading rooms, has sparked concerns and led to calls for stronger measures to combat such crimes. Police are working to investigate and prosecute those involved in these scams in order to protect investors and crack down on organized crime in the crypto space. Vigilance and caution are advised when participating in online investment opportunities to avoid falling victim to similar fraudulent schemes.
