Bitrabo Editorial
A South Korean tech firm’s CEO and his associate have been arrested and accused of involvement in a cryptocurrency scam totaling over 500 billion won. The scheme preyed on elderly individuals by offering unrealistic returns, impacting thousands of victims.
Crypto Fraud Scheme Targets Vulnerable Population
In a recent development, the CEO of Wacon, Byun Young-oh, and Vice Chairman Yim Mo-Soo were apprehended for their alleged roles in a cryptocurrency scam valued at hundreds of billions of won. These individuals were taken into custody on suspicion of fraud and related offenses, following concerns about potential evidence tampering.
The company is suspected of operating a Ponzi scheme with around 12,000 members, offering crypto staking products like the unregistered “MainEthernet” wallet service. Wacon used a pyramid-like structure to attract investors, primarily targeting elderly individuals who were not well-versed in cryptocurrency and Ponzi schemes.
Investors were promised significant returns, including 100% interest, profits from a casino-AI platform, and other services. Despite these assurances, Wacon failed to fulfill its commitments, causing investors to lose billions of won when payments halted in June 2023.
In an attempt to evade scrutiny, Wacon frequently changed platforms, compelling investors to transfer funds and recruit new participants during the police investigation.
CEO Charged with Major Fraud Allegations
The Seoul Central District Prosecutors’ Office’s Fifth Criminal Division recently indicted Byun and Yim on charges of fraud and fraudulent receipt of funds. Investigations revealed that the company duped approximately 500 investors of 54 billion won ($39 million) and illicitly obtained around 500 billion won ($365 million).
The unauthorized collection of funds without proper licenses or registrations constitutes pseudo-receipt, potentially leading to fraud charges if the funds cannot be returned. Authorities are actively seeking additional victims and accomplices while examining Wacon’s parent company, SAK-3, for suspected fraudulent activities.
Further investigations suggest that SAK-3, chaired by Kim Dae-chun, and its shareholders, including Byun, engaged in a similar cryptocurrency Ponzi scheme resulting in losses amounting to 1 trillion won, encompassing Wacon’s losses and investments from other parties.