South Korean law enforcement authorities have taken action against a suspected "international" cryptocurrency fraud ring, freezing assets totalling more than $12 million and apprehending 49 individuals.

The Seoul Metropolitan Police Agency's Cyber Investigation Department, as reported by Newsis, disclosed the arrest of 49 individuals, including six suspected leaders of separate organisations. The group faces charges of fraud, with authorities believing they were involved in operating a counterfeit cryptocurrency investment platform.

Primarily, the site was used to attract investors from abroad, including the Philippines, with the police asserting that the group was active from September 2020 to April of the following year. During this time, they managed to amass over $11.5 million from at least 253 victims.

The police suspect that the group targeted potential victims by purchasing personal data that had been exposed on the internet. Additionally, the group had acquired access to 1.62 million pieces of unlawfully obtained personal information.

Furthermore, the group attempted to entice potential investors to their platform by randomly sending promotional messages to public cryptocurrency-related chat app groups.

Additional Arrests in Cryptocurrency Fraud Case in Daegu

Earlier this week, the police arrested 25 people in Daegu, alleging that this group had also used chat app groups to lure potential victims.

The police shared images of the money they seized from the alleged cryptocurrency fraud ring.

Source: Seoul Metropolitan Police Agency

The Modus Operandi of the 'International Crypto Fraudsters'

The police claim that the latest fraudulent scheme was highly sophisticated and involved multiple teams within the six organizations. Some members posed as contented investors in chat rooms, showcasing their supposed earnings from the platform.

Others masqueraded as fake cryptocurrency exchange employees, initially promising substantial returns on investments. When victims made small initial investments, they were rewarded with withdrawable returns of 1.5 times their investment, which helped the fraudsters gain the trust of their victims.

The counterfeit exchange then assured that larger investments would yield profits of 3 to 5 times the initial amount. Victims were informed that they could not withdraw their funds without making additional deposits or paying more "taxes and fees."

In case victims voiced concerns, another team would contact them, claiming that an investigation by the regulatory Financial Supervisory Service was imminent. Eventually, victims were forcibly removed from the chat rooms and left with no access to the fake exchange.

This scheme bears similarities to the V Global cryptocurrency exchange platform, which appeared to be a legitimate trading platform but was exposed as a front for a $2.3 billion fraudulent operation. Earlier this year, the CEO of V Global was sentenced to serve 25 years in prison, and several executives received lengthy jail sentences as well.

Rising Concerns of Crypto Fraud in South Korea

A police spokesperson stated:

"We will crack down thoroughly on vicious financial crimes that are causing trouble for ordinary people. [Criminals prey on] victims in difficult economic situations due to rising inflation and high-interest rates."

The spokesperson cautioned the public to exercise caution when investing in virtual assets, stocks, futures, and similar areas, as criminals often use the promise of substantial profits as bait.