Law enforcement in South Korea has made a significant breakthrough in combating a social media-driven crypto scam by apprehending 19 individuals associated with a fraudulent “crypto reading room.” The recent raid conducted by the Daegu Police Agency on May 21st uncovered a deceitful scheme that targeted over 300 unsuspecting investors, resulting in a massive loss of $19 million.
Crypto Scam: Misleading Chats, False Profits
Authorities have accused an international group of running an “open chat room,” likely on platforms such as Telegram or KakaoTalk, posing as a legitimate source for cryptocurrency trading advice.
The chat room was meticulously orchestrated, with members pretending to be experienced crypto professionals, offering seemingly valuable insights and touting significant returns.
To build trust, other members played the role of ordinary investors, endorsing the fraudulent activities and luring victims into the trap of the scam.
Fake Exchanges, Heartless Deception
The elaborate facade began to crumble as victims were directed to download apps associated with fake cryptocurrency exchanges. These illicit platforms featured unlisted coins, enhancing the perception of exclusivity and potential profits.
In a bid to gain trust, the scammers allowed victims to make small initial gains, encouraging them to invest larger amounts. However, the true betrayal emerged when victims tried to withdraw their funds and faced fabricated “withdrawal fees.”
Refusal to pay these fees resulted in the gang cutting off all communication, leaving victims empty-handed with nothing but false promises and lost savings.
A Harrowing Twist: Exploitative Tactics Abroad
The investigation uncovered a disturbing recruitment strategy used by the mastermind, known as “pig-butchering,” where individuals were lured with enticing job prospects in Myanmar.
Upon arrival, victims had their passports and phones confiscated, coercing them into joining the criminal enterprise. This tactic sheds light on the global reach of these illicit networks and their exploitation of vulnerable individuals.
Urgent Need for Oversight: Curbing Crypto Anarchy
The recent crackdown emphasizes the critical requirement for stringent regulations within the cryptocurrency realm. South Korea, a hub for crypto activities, has witnessed a surge in scams facilitated through social media channels.
Experts speculate that this incident could prompt the government to enforce tighter controls on both cryptocurrency platforms and social media communities offering investment guidance.
Featured image courtesy of Pacific Standard, chart by TradingView
