Cryptocurrency Pyramid Scheme Exposed In South Korea

Siamak Masnavi
  • Two men in South Korea reportedly swindled unsuspecting investors out of 20 billion won using a cryptocurrency pyramid scheme
  • The news comes days after a report revealed a pyramid scheme involving cryptocurrencies was busted in China.

According to Yonhap News Agency, two men in South Korea allegedly managed to take 20 billion South Korean Won ($18.7 million) from unsuspecting investors using some kind of cryptocurrency pyramid scheme.

Yesterday afternoon, a judge presiding over Incheon District Court in the country's capital punished the two men with respective fines of $15 million and $8 million. The report says that the judge commented: "The multi-level transaction is a risk to the socioeconomic order with mass production of many victims."

He went on to say that the size of the fines he was giving reflected the large amount of money allegedly swindled out of the victims and number of victims involved. Apparently, Interpol is currently looking for the mastermind behind the whole operation.

It is interesting that this report comes just a couple of days after the report from China of the arrest of nine suspects who allegedly obtained over $13 million from over 13,000 participants in a cryptocurrency pyramid scheme over there.

While it’s unclear how the South Korean scheme worked, reports reveal the Chinese scheme saw the scammers sell investors a cryptocurrency – DBTC – at a price of 13 yuan ($0.48) per token, while promising them returns of 80,000 yuan ($13,000) per day for an initial investment of 3 million yuan ($480,000).