Lawrence Damilola
Prosecutors in South Korea have charged a group of suspected fraudsters accused of impersonating regulators to scam victims out of $22.7 million.
According to local media reports, the group was led by four men in their 40s who allegedly tricked users into paying $5,000 in Tether (USDT).
Fake Exchanges and Crypto Fraud in South Korea
Authorities allege that the group created fraudulent trading platforms, including BISSNEX and BDCDP, which pretended to be legitimate crypto exchanges. They reportedly used YouTube channels and the Naver Band chat app to attract investors. Prosecutors say that once victims were on these platforms, the group sent out letters that appeared to be from the Financial Supervisory Service (FSS) and the Korean National Police Agency.
One such letter, dated April 16, 2024, was published by local media and bore the official-looking seals of both the FSS and the police. The letter claimed to address users of BISSNEX and stated that the FSS and police were investigating a 41-year-old man accused of defrauding the platform’s customers. It read, “Since November last year, [the man] has been inviting thousands of BISSNEX investors to create cryptoasset trading accounts.”
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BISSNEX allegedly informed its users that the man had illegally conducted financial transactions on the platform and warned that the police and FSS were investigating. It asked clients to pay a refundable $5,000 USDT deposit to assist with the probe, promising to refund the money once the investigation was complete.
South Korean police noted that these tactics resemble those used in other crypto-related fraud cases. Prosecutors said the indicted group also impersonated major firms like Shinyoung Securities and DB Financial Investment, using fake bankbooks and photos of cash in their chat groups to mislead more investors. Authorities added that the group had “distributed more fake official documents impersonating the police and the Financial Supervisory Service.”
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Victims of this scheme suffered significant financial losses, with one unnamed victim telling local media, “Some victims lost 2 billion won [over $1.5 million] in investments.” Prosecutors have indicated that the investigation is ongoing.
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LAWRENCE
Lawrence is a cryptocurrency journalist covering blockchain developments and digital assets.
