South Korean crypto exchange scammed for fear of $ 2 billion scam
Police in South Korea fear that the V Global cryptocurrency exchange could become the center of a fraud network that siphoned off around $ 2 billion as investigations into the platform intensify and police raided the exchange’s offices.
This scam by a Korean cryptocurrency exchange caught in the midst of these $ 2 billion scams has charged and arrested four people on multiple counts.
Scam by the South Korean cryptocurrency exchange for fear of $ 2 billion fraud
According to Seoul Shinmun and Hankook Ilbo, police believe that around 52,000 customers could be affected. They’ve been investigating the platform for several months after a group of investors claimed they couldn’t withdraw funds from the exchange.
Approximately $ 214 million worth of assets were re-frozen in May.
Police say they believe the platform – whose website is still active and supposedly looks like a standard South Korean cryptocurrency exchange – is actually a front for a pyramid scam. The website has not been updated since May and the company did not respond to Cryptonews.com’s request for comment.
The police have received arrest warrants for four people who are believed to be senior executives. A court that issued an arrest warrant agreed with the police that these individuals could flee with the investor’s assets. The court probably feels like the “exit scam” that appears to have destroyed South African investors in the Africrypt platform with the role of mastermind.
In South Korea, meanwhile, more than 70 other people have been warned as the police are still investigating V Global.
The police charged the four arrested persons with multiple fraud and illegal marketing.
The exchange is said to have been the idea of a 31-year-old man with the surname Lee. The media in South Korea reported that Lee was under investigation for the use of alleged and illegal multilevel marketing (MLM) methods while he was on another, now defunct exchange.
Police say Lee “lived a life of luxury” and that the V Global hierarchy consisted of eight levels, with 82% of “members” at the lowest level. Members are informed that they will receive a bonus for recruiting more people and they can rest assured that their deposit of approximately $ 5,300 will generate a return three times higher than their original investment.
Police added, however, that many of these bonuses appear to have been paid out in proprietary tokens, which employees said had “no monetary value.”
Lawyers representing a group of clients say it affects up to 70,000 people.
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