A company whose key officials were referred to prosecutors on suspicion of crypto investment fraud continued recruiting new investors using the same methods afterward, it has been confirmed. Concerns are being raised that damages could spread and recovery for existing victims could become even more difficult, as investment funds kept flowing in while the investigation was underway.
According to police on the 26th, the Gimpo Police Station in Gyeonggi Province referred three officials of virtual asset company A to the Bucheon branch of the Incheon District Prosecutors' Office on fraud charges without detention on February 12 this year. The initial complaint was filed in December 2024. At the time, police declined to refer the case, citing reasons such as insufficient evidence to conclude that the suspects had held investment seminars. However, after victims raised objections by submitting additional materials such as tax invoices in company A's name, the case was reinvestigated and the officials were handed over to prosecutors.
The suspects are accused of inducing crypto investment by explaining, in effect, that the possibility of principal loss was low and that they could notify investors in advance of when losses were expected. The complainants said that in 2024, they invested in the relevant coin after hearing explanations from company A's officials at the recommendation of an acquaintance, but were later unable to recover their investment as sales and withdrawals were restricted on the platform where the coin was traded. The victims see this as similar to existing crypto fraud methods, in which perpetrators recruit investors by touting the possibility of an exchange listing, then shut down the exchange and become uncontactable.
The problem is that investment recruitment continued even while the investigation was underway. The victims claim that a pattern was repeated in which a new coin was promoted and its listing prospects emphasized each time the value of the existing coin fell. Separately from the referred suspects, other officials of company A changed the company's name and then held information sessions in various regions to induce additional investment and recruit new members.
The information session booklet contained content stating that buying 5,000 coins would yield a total of 10,000 coins as rewards through automatic mining over 180 days, and that investors could expect "200% returns over six months." Attendees were also reportedly informed of the possibility of a future exchange listing.
Currently, about 200 people, including investors, are participating in an online community set up to respond to the related investment damages. In particular, complaints from victims have been filed not only in Gimpo but also in Busan and South Gyeongsang Province, and it has been confirmed that police and prosecutors are expanding their investigation. The victims are preparing a joint response by sharing their investment records, information session materials, and details of the officials' activities.
Company A, on the other hand, countered that the corporation had nothing to do with recruiting crypto investment. One official included among those accused claimed in a phone call with the Seoul Economic Daily, "I only shared information about coins that looked promising; I did not recruit investment funds or issue coins," adding, "there is also no fact that related funds flowed into the corporation." He also explained that while it is true the company changed its name, 90% of its members had been replaced, so it has virtually no connection to the previous organization.
Illegal activities involving virtual assets are increasing rapidly, but actual arrests of suspects are instead declining. According to National Police Agency data obtained by this newspaper through the office of People Power Party lawmaker Park Su-min, the number of cases in which illegal virtual asset activities were detected rose about 7-fold from 482 in 2024 to 3,373 last year, but the number of people arrested fell 23.2% over the same period, from 2,191 to 1,682. In the first half of this year, 1,529 cases were tallied, but the number of people arrested came to just 304.
Analysts say that as criminal organizations base themselves overseas and operate in cell-like structures, securing custody of actual suspects is becoming increasingly difficult even as cases surge. Within the country, often only lower-level introducers or recruiters are exposed, while clues such as the accounts and contact networks leading to the ringleaders are cut off.
Hong Pu-reun, managing attorney at Decent Law Office, stressed, "In multi-level Ponzi schemes, introducers are often themselves victims, so it is not easy to hold the ringleaders accountable." He added, "Only by identifying the ringleaders together and applying not only fraud charges but also violations of the Act on Regulation of Similar Receiving of Money and the Door-to-Door Sales Act can this lead to a substantive investigation."
