South Korean prosecutors have indicted a group of suspected crypto fraudsters who impersonated regulators to scam victims out of $22.7 million. The group, led by four men in their 40s, utilized fake trading platforms named BISSNEX and BDCDP to deceive users into paying $5,000 worth of USDT. They used sophisticated tactics, including operating YouTube channels and a Naver Band chat group to lure victims. The fraudsters then sent letters to investors, purporting to be approved by the Financial Supervisory Service and the police, claiming to be investigating crypto-related fraud allegations.
The letter suggested that a 41-year-old man had conducted illegal financial transactions on the BISSNEX platform, prompting the police and FSS to investigate. BISSNEX asked clients for a refundable deposit of USDT 5,000 to conduct their own investigation and freeze wallets linked to the suspect and his recruits. This tactic is not new, as South Korean fraudsters have previously posed as regulatory officials to request investigation fees in the form of cryptocurrencies. The group also impersonated stock market-listed firms and distributed fake official documents to further deceive victims.
A former chief of the Yongsan Police Station was sentenced to three years in prison for his role in the Halloween crowd crush, holding a South Korean public office responsible for the incident. The group of fraudsters involved in the crypto scam used similar tactics, posting photos of cash and fake bankbooks to attract investors on their chat app channel. Lawyers suggest tightening regulations around chat app-based crypto reading rooms to prevent future incidents. The investigation into the case is ongoing, with potential damages expected to increase beyond the initial $22.7 million reported.
Prosecutors have observed recurring patterns in South Korean crypto-related fraud, with scammers setting up fraudulent exchanges, freezing wallets, and then posing as regulatory officials to extort investigation fees from victims. The use of fake official documents and impersonation of legitimate entities further complicates the scams. The victims of these scams have reported significant financial losses, with one individual losing over $1.5 million. The total damages sustained from these fraudulent activities are estimated to reach $22.7 million, highlighting the need for tighter regulations and increased awareness around crypto fraud in South Korea.
