Essential Reading for Victims of Cryptocurrency Loan Scams
Typical Types of Cryptocurrency Loan Scams
Recently, cryptocurrency loan scams have become increasingly sophisticated, carefully disguised to appear like legitimate financial transactions. At first glance, they may look no different from lawful crypto-backed loan services.
Common methods include the following:
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Luring investors with promises of high returns and low-interest crypto-backed loans
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Explaining a structure where a loan is executed after depositing USDT, while in reality no loan is ever provided
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Demanding advance payments under the guise of loan fees or security deposits
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Using fake loan websites that impersonate well-known exchanges or platforms
The key point is that although these schemes take the form of a “loan,” their substance is to deceive victims into transferring cryptocurrency to a specific wallet and then misappropriate it. Missing this fundamental nature can completely derail the direction of any legal response.
Key Legal Issues at Stake
The most important legal criterion in cryptocurrency loan scams is whether fraud under Article 347 of the Korean Criminal Act is established. Even if the transaction is labeled as a loan, fraud is constituted if the perpetrator deceives the victim and thereby obtains property or a financial benefit.
Investigative authorities and courts typically examine the following elements when determining whether fraud has occurred:
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Whether there was a deceptive act toward the victim
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Whether the victim was induced into a mistake due to that deception
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Whether there was a disposition by the victim based on that mistake (i.e., transfer of cryptocurrency)
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Whether the perpetrator acquired property or a financial benefit
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Whether there is a causal relationship between the deceptive act and the victim’s financial loss
If there are multiple victims or repeated offenses, enhanced punishment may apply, such as habitual fraud under Article 351 of the Criminal Act or aggravated penalties under Article 3 of the Act on the Aggravated Punishment of Specific Economic Crimes. If a criminal organization was formed or joined, additional liability may arise under Article 114 of the Criminal Act.
What matters is not the form, but the actual structure of the scheme. Only by proving this process can a victim move beyond the status of a “cryptocurrency scam victim.”
Risk Factors Commonly Overlooked by Victims
One of the most common misconceptions among victims is the belief that “because it is structured as a loan, it is different from an investment scam.”
However, even if the scheme outwardly takes the form of a loan, fraud is established if, from the outset, the perpetrator had no intention or ability to provide a loan and instead deceived the victim to misappropriate cryptocurrency. This is not merely a civil breach of contract, but a criminal offense subject to punishment.
Victims often give up on taking action for reasons such as:
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Assuming recovery is impossible because overseas platforms or wallets are involved
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Missing the appropriate time to report due to delays
The problem is that the longer reporting is delayed, the more difficult it becomes to trace cryptocurrency wallets, freeze scam-related accounts, track criminal proceeds, and identify those involved.
A misjudgment at this stage can effectively eliminate any realistic chance of recovery.
Decent Law Firm’s Approach and Direction of Assistance
Decent Law Firm does not treat cryptocurrency loan scams as simple criminal complaints. The core issue lies in the underlying fraud structure.
Our approach includes:
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Analyzing the flow of cryptocurrency and the structure of the scam
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Developing a strategic approach at the criminal complaint stage
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Conducting a realistic assessment of the possibility of tracing and recovering virtual assets
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Determining whether to pursue civil proceedings in parallel, if necessary
Cryptocurrency-related cases require a fundamentally different approach from ordinary fraud cases. The later the response, the more sharply the chances of recovery decline.
If you are trapped in repeated anxiety and uncertainty over this issue, there is no need to lose time making decisions on your own. At the same time, you must clearly recognize that taking this matter lightly can lead to irreversible consequences.
Because cryptocurrency loan scams are cases in which early action directly determines the outcome, we strongly recommend seeking legal advice at the earliest possible stage.
