South Korean law enforcement has dealt a major blow to the social media-fueled crypto scam by arresting 19 people linked to a deceptive “crypto reading room.” THE Daegu police raidwhich took place on May 21, revealed a manipulative scheme that preyed on more than 300 unsuspecting investors, defrauding them out of a whopping $19 million.
Crypto scam: misleading discussions, illusory profits
Authorities say the international gang operated an “open chatroom,” likely on platforms like Telegram or KakaoTalk, posing as a legitimate cryptocurrency trading advice platform.
Police describe the room as a meticulously designed stage. The gang members, posing as seasoned crypto experts, dispensed seemingly valuable advice and boasted of substantial returns.
Others, acting like ordinary investors, stepped in with enthusiastic support, weaving a network of trust to lure victims into the trap.
False exchanges, brutal betrayal
The meticulously designed facade collapsed when victims were steered into downloading apps connected to fake crypto exchanges. According to officials, these fake platforms housed unlisted coins, further fueling the illusion of exclusivity and potential profit.
As of today, the market cap of cryptocurrencies stood at $2.5 trillion. Chart: TradingView.com
To build trust, the crypto scam gang allowed victims to make small initial gains, encouraging them to invest larger sums. The real horror happened when the victims tried to withdraw their funds. They ran into a seemingly insurmountable obstacle: fabricated “withdrawal fees.”
Refusal to pay these fees led the gang to cut off all communication, leaving victims with nothing but empty promises and stolen savings.
Pig butchery abroad: a frightening twist
The investigation revealed a particularly worrying recruitment tactic used by the ringleader. Double “pig butchery” it involved promising unsuspecting individuals lucrative employment opportunities in Myanmar.
Upon arrival, a sinister bait and switch unfolded. Passports and phones were confiscated and victims were forced to join the fraudulent operation. This tactic highlights the international reach of these criminal networks and the efforts they make to exploit their vulnerabilities.
Crypto Wild West: A Call for Regulation
This raid highlights the urgent need for stricter regulation in the area of cryptocurrencies. South Korea, a hotbed of crypto activity, has seen a surge in social media scams.
Experts believe the case could prompt the government to implement stricter controls on crypto platforms and social media groups offering investment advice.
Featured image from Pacific StandardTradingView chart
