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Media CoverageFrom voice phishing to coin-related crimes, financial fraud victims on the rise
Despite the economic downturn, the investment frenzy in virtual assets, stocks, and similar ventures continues, leading to an increase in cybercrimes using these investments as bait. Financial fraud schemes, once dominated by 'voice phishing,' have shifted to cyber environments, such as 'investment chat rooms,' resulting in a growing number of victims. (omitted) The surge in prices of virtual assets like Bitcoin and the skyrocketing value of IPO stocks, where quick investments can yield substantial returns, have been identified as reasons for the increase in cyber fraud crimes driven by a get-rich-quick mentality. Attorney Pureun “Ian” Hong from Decent Law Firm explained, "Many people fall victim to fraud after being influenced by stories of acquaintances who made large sums through actual coin investments. In some cases, this type of fraud spreads like a pyramid scheme, creating collective victims, and at times, victims themselves turn into perpetrators, requiring caution." Initially, the trend was to simply operate investment chat rooms and demand fees for investment guidance, but the scale of fraud has since grown with the creation of sophisticated fake investment applications. Furthermore, recently, small crime syndicates have been operating in a decentralized network structure, where different groups specialize in victim recruitment, money laundering, distribution of ghost accounts, and website development. This decentralized structure makes it easier for smaller groups to sever ties with the larger organization if they are caught, making it difficult for law enforcement to apprehend all the culprits involved.
2024-04-23 Seoul Economy -
Media Coverage
Key Focus of the Terra · Luna Trial: Whether They Qualify as Securities
The fallen 'Korean Elon Musk' is expected to return to Korea. This refers to Kwon Do-hyung, CEO of Terraform Labs, the developer of Terra and Luna coins. His extradition to Korea is expected to impact the ongoing trial. On the 7th, the Podgorica High Court in Montenegro overturned the previous decision to extradite Kwon to the U.S. and ruled for his extradition to Korea. (omitted) One of the key issues anticipated to be addressed during the trial following Kwon's extradition is whether Terra and Luna can be classified as securities. The determination of whether virtual assets are securities will affect the severity of the punishment, as recognizing them as securities could lead to charges under the Capital Markets Act. (omitted) The legal community expects that the determination of Terra and Luna's securities status will have an impact on other virtual assets. Hyeonsu "Elliot" Jin, an attorney at Decent Law Firm, specializing in virtual assets, stated, "It is highly likely that Kwon will be found guilty of fraud under the Special Act on Aggravated Punishment for Specific Economic Crimes. The key issue is whether there was a violation of the Capital Markets Act,' adding, 'Regardless of the outcome of the punishment, this could serve as a starting point for determining the securities status of virtual assets."
2024-03-18 Ilyosisa -
Media Coverage HOT
Foreign Coin Fraud Victims Struggle with Legal Challenges
More than 10,000 foreign investors are struggling with legal action after Haru Invest, a company that raised approximately 1.4 trillion KRW (around $1.1 billion USD) worth of cryptocurrency from numerous investors, suddenly suspended withdrawals. With foreign victims reportedly double the number of domestic ones, attention is focused on how the South Korean judicial authorities will proceed with the investigation. As of the 13th, according to representatives of foreign victims, out of the 16,347 individuals who entrusted their coins to Haru Invest, 11,313 are foreigners, with their damages estimated at over 1 trillion KRW. The victims hail from various countries, including the U.S., India, France, Finland, Australia, Iceland, Norway, Latvia, Ireland, and Switzerland. Law firms representing just a small fraction of these foreign victims have so far reported damages amounting to approximately 40 billion KRW. (omitted) Since Haru Invest is headquartered in South Korea and operated by offering returns to investors based on the condition of coin deposits, without involving any foreign cryptocurrency exchanges, any legal response must be pursued within South Korea. Hyeonsu “Elliot” Jin, Managing partner at Decent Law Firm, which represents some of the foreign victims, stated, “The Haru Invest case is not just a simple cryptocurrency scam in Korea, but a global issue with victims scattered worldwide. To restore the confidence of foreign investors, the South Korean judicial system must take active measures.”
2024-03-13 Seoul Economy -
Media Coverage
‘1.4 Trillion Won Cryptocurrency Scam’ Haru Invest Evades Capital Erosion by Embezzling Digital Assets
The Haru Invest scam, which swindled 1.4 trillion won worth of digital assets from customers, appears to have been initiated to save the company from a state of capital erosion. When the 'algorithm trading' method, which promised annual returns of 12-16% with no risk, failed to deliver, the company even created fabricated profit verification posts to cover up the issue. According to sources from the cryptocurrency industry and legal circles on the 11th, the Seoul Southern District Prosecutor's Office's Joint Investigation Team on Cryptocurrency Crimes indicted and detained A and B, co-representatives of Blockcrafters, which operated Haru Invest, on charges of fraud under the Specific Economic Crimes Aggravated Punishment Act. The Chief Operating Officer (COO), C, was indicted without detention on similar charges. They are accused of embezzling 1.39 trillion won worth of digital assets from 16,347 investors. (omitted) The attorneys representing the victims, Pureun “Ian” Hong and Hyeonsu “Elliot” Jin from Discent Law Firm, stated, 'It has become evident during the investigation that Haru Invest’s business deteriorated into a 'Ponzi scheme'. The truth must be revealed in court.'
2024-03-11 biz.chosun -
Media Coverage
Details of the Indictment Against Haru Invest Executives for the '1 Trillion KRW Coin Exit Scam'
Prosecutors have specified in the indictment against Haru Invest executives, who deceived customers into depositing virtual assets worth 1.4 trillion KRW and then prohibited withdrawals, that they entrusted the management of 1.31 trillion KRW worth of virtual assets to an unqualified operator who did not meet the selection standards. According to the indictment filed on the 10th against the joint CEOs of Haru Invest, Mr. A (44) and Mr. B (40), and the business director Mr. C (40), they began entrusting the management of 90 Bitcoins in August 2020 to Mr. D, an unqualified operator who did not meet the criteria for selecting external asset managers. (omitted) The Virtual Asset Crime Joint Investigation Unit of the Seoul Southern District Prosecutors' Office (headed by Chief Prosecutor Lee Jeong-ryeol) filed detention indictments against these individuals on the 22nd and indicted the company's Chief Operating Officer, Mr. E (38), without detention. Hyeonsu “Elliot” Jin and Pureun “Ian” Hong, Managing partner at Decent Law Firm, representing the victims, stated, "This case is a global fraud scheme, with victims from more than 20 different nationalities. Their crimes must be thoroughly revealed during the trial process."
2024-03-10 Financial News -
Media Coverage
'We Mine Dormant Wallets and Give Away Bitcoin,' Beware of New Cryptocurrency Scam
As the price of Bitcoin has risen to the 90 million KRW range, the once-joking concept of a '100 million KRW Bitcoin' era is now on the horizon. With growing interest in the virtual asset (cryptocurrency) market, companies suspected of promoting new cryptocurrency-related scams are becoming more prevalent. According to the National Police Agency on the 7th, there were 281 cases of illegal activities related to virtual assets last year, more than double the number from the previous year (2022, 108 cases). Illegal activities in the virtual asset sector are broadly classified into three categories: Ponzi schemes and pyramid sales, illegal exchange activities, and other fraudulent purchasing schemes. However, new types of crimes continue to emerge. Recently, there have been cases where companies encourage investments by claiming that if you invest in a business mining Bitcoin from a large dormant wallet, you will receive a share of the Bitcoin. This has particularly spread among the elderly, with some individuals investing amounts ranging from 10 million KRW to tens of millions of KRW. (omitted) Hyeonsu “Elliot” Jin, Managing partner at Decent Law Firm, advised, "Even if they promise to distribute profits from successful Bitcoin mining, investors have no way to verify whether the Bitcoin mining has actually succeeded. If someone is promoting coin investment by showcasing large profits, you should first suspect it might be an investment scam. If you suspect an investment scam, seek help from a lawyer specializing in cryptocurrency fraud and file a criminal complaint or a lawsuit for the return of your investment."
2024-03-07 Korea Economy
