South Korean police have conducted raids on the offices of Winnerz, a sports-themed blockchain platform, as part of an investigation into allegations that its WNZ token is a “scam coin.” The Seoul Metropolitan Police Agency’s criminal task force searched and seized evidence from two locations, including a Winnerz office in Gangnam, Seoul, and the home of former Winnerz CEO, Choi Seung-jeong, on April 1. The police were granted a court warrant to search the premises based on suspicions of fraud and coercion under the Act on Aggravated Punishment for Specific Economic Crimes. Several South Korean celebrities, sports stars, and social media personalities have denied any affiliation with Choi and Winnerz.
The controversy surrounding Winnerz and Choi was sparked by a viral anonymous post from a group of investors accusing Winnerz of operating a “multi-level scam” on February 2. This post reignited previous controversies surrounding a token called Golden Goal (GDG), which some have labeled a “scam coin.” Although WNZ has been listed on overseas crypto exchanges, numerous South Korean investors have filed complaints about the token with the Financial Services Commission (FSC). The FSC referred the case to the police for investigation, separate from two other WNZ-related complaints they are handling independently. It has been reported that Choi may have been involved in promoting GDG, which is suspected to be a crypto fraud scheme worth billions of KRW.
On March 28, police arrested the CEO of Golden Goal, surnamed Kim, on charges of fraud-related offenses. The Seoul Southern District Prosecutors’ Office’s Virtual Asset Joint Investigation Unit, the country’s top anti-crypto crime division, initiated an investigation into Choi on similar fraud charges at the end of last month. The news of these developments has caused WNZ prices to decline. K-pop stars such as Choi Si-won and Cho Hyun-young have denied any involvement in the “Winnerz Coin controversy” in mid-February amid the ongoing investigations and allegations.
The police raids on Winnerz’s offices and Choi’s home mark a significant escalation in the investigation into the alleged scam coin activities. The involvement of South Korean celebrities and influencers in promoting potentially fraudulent cryptocurrency projects has caused widespread concern and controversy. The case has shed light on the issues surrounding scam coins and fraudulent schemes in the crypto market, particularly in South Korea, known for its active cryptocurrency trading community. Both prosecutors and regulatory authorities are actively pursuing these cases to protect investors and crack down on illegal activities in the industry.
The accusations of fraud and coercion against Winnerz and its executives have raised questions about the regulation of cryptocurrency projects and the accountability of individuals involved in promoting questionable tokens. The investigations into WNZ and GDG highlight the risks associated with investing in unverified and potentially fraudulent digital assets. The response from law enforcement and regulatory agencies in investigating these cases demonstrates a commitment to enforcing laws and protecting the interests of investors in the cryptocurrency market. It remains to be seen how these investigations will unfold and what consequences the individuals and entities involved will face as a result of their alleged involvement in scam coin activities.
