Fake Crypto Mining Site Exposed as Illegal Gambling Den in South Korea – Police Seize $95K

Crypto Mining Front Exposed As Police Uncover Hidden Gambling Operation

What appeared to be a cryptocurrency mining office in the South Korean city of Gwangju turned out to be a front for an illegal gaming operation, according to police.

Authorities confirmed on 9 April that they have booked the operator of the establishment on suspicion of violating the Game Industry Promotion Act.

Gaming Machines Disguised As Mining Equipment

Investigators from Gwangsan Police Station raided a commercial office space in the Gwangsan District, where they seized 50 gaming machines and two kiosks.

The equipment had been disguised to look like virtual currency mining rigs.

The operator, identified only as Mr A, had reportedly set up the space to resemble a crypto mining site while secretly running it as a gambling operation.

Police said Mr A had invited customers to join as members and guided them to create individual crypto wallets.

These wallets were used to funnel gambling payments disguised as crypto-related transactions.

Patrons were drawn in with modified mobile games installed on PC terminals, which had been illegally altered to allow gameplay on desktop devices.

Players Charged Per Hour With Cash Prizes Offered

Authorities said that customers were charged 50,000 won (about $34) per hour to use the machines.

High-performing players were then rewarded with cash payouts.

An unregistered illegal game room disguised as a cryptocurrency mining farm. (Source: Gwangsan Police Station)

According to investigators, the venue is believed to have generated around 140 million won ($95,000) in illicit profits.

A police spokesperson explained,

“We plan to crack down – continuously and resolutely – on illegal gaming rooms. These establishments pose a threat to the public economy. We will actively block illegal gaming centres from reopening or expanding their reach.”

Disguised As Coin Exchange And Mining Facility

The investigation revealed that the operator had falsely presented the office as a centre for mining virtual currencies and facilitating crypto exchanges.

Users were asked to deposit funds into the system under the guise of participating in digital asset transactions.

However, the funds were instead linked to gambling activities through in-app transactions, with a 10% fee deducted before cashing out.

Part Of A Broader Crackdown On Evolving Illegal Operations

The raid was part of a joint operation with the Game Content Rating Board after authorities received intelligence indicating that new types of unregistered gambling rooms were spreading into the region from Incheon and Daejeon.

Police confirmed that efforts are underway to identify any accomplices who may have helped operate the venue.

Gwangsan Police Chief Jeong Kyung-ho stated,

“We will continue to take strong and persistent action against illegal gaming rooms that threaten the everyday economy, and we will ensure that they do not resurface after crackdowns.”

Broader Context of Crypto-Linked Crimes in Region

Months ago, there was another incident in the same province, where police dismantled a drug distribution network allegedly using cryptocurrency.

In that case, seven people were arrested in September last year for hiding methamphetamine in over 100 locations across Gwangju’s West and North districts.

Officers said the suspects were linked to a wider drug dealing group.