South Korean police arrest 19 in crypto fraud bust

South
Korean
authorities
have
arrested
19
members
of
a
fraudulent
social
media
chat
group
that
scammed
308
investors
out
of
nearly
$19
million. 

Those
arrested
had
operated
an
open
chat
room
and

scammed
hundreds
of
investors
out
of
$18.8
million
by
promising
quick
profits
if
victims
invested
in
unlisted
coins.
The
chat
room
pretended
to
offer
legitimate
cryptocurrency
trading
tips
and
even
delivered
some
profits
before
encouraging
members
to
invest
in
unlisted
coins,
according
to

Seungwon
Lee. 

Unlisted
coins

The
fraudulent
unlisted
coins
never
delivered
any
profits,
and
those
arrested

severed
ties
with
investors
when
the
investors
started
demanding
their
money
back
or
profits.
When
victims
attempted
to
withdraw
their
funds,
the
gang
would
demand
withdrawal
fees.
If
the
victim
refused,
the
gang
would
cut
off
contact.

The
Daegu
Police
Agency’s
criminal
task
force
made
the
arrests
on
May
21.
However,
they
believe
that
at
least
six
other
suspects
are
still
at
large
and
are
currently
overseas.
Interpol
has
been
requested
to
issue

red
notices
for
these
individuals. 

Pig-butchering
tactics

The
gang
leader
used

pig-butchering
tactics
to
recruit
new
members.
Per
the
police
report,
the
leader
of
the
chat
room
would
promise
individuals
employment
in
Myanmar,
encourage
them
to
illegally
enter
the
country,
and
force
them
to
join
the
criminal
organization. 

The
leaders
confiscated
passports
and
cell
phones
and
confined
individuals
to
coerce
them
into
committing
fraud. 

Pig
butcher

scams
typically
start
when
bad
actors
gain
the
trust
of
an
unsuspecting
victim
and
then
ask
them
to
make
large
investments
in
lucrative
schemes.
After
the
victim
transfers
the
funds,
the
fraudsters
disappear
with
the
money.

Nithin
Kamath,
the
founder
of
Zerodha,

posted
on
X,
“As
the
name
implies,
a
pig
butchering
scam
involves
fattening
the
victim
before
butchering.
Scammers
gain
the
trust
of
users
by
using
fake
profiles.
They
use
the
pretense
of
love
and
friendship
to
gain
the
trust
of
users
and
then
induce
them
to
send
money
for
jobs
and
high-return
investments
and
steal
the
money.
These
scams
are
global,
and
their
scope
is
staggering.”

These
arrests
come
amidst
other
global
crypto
arrests,
on
Monday,
the
United
States
Justice
Department

arrested
two
Chinese
nationals
behind
a
$73
million
money
laundering
scheme
using
similar
pig-butchering
tactics.

The
police
are
currently
trying
to
locate
the
stolen
funds
and
have
requested
Interpol’s
assistance
in
finding
six
additional
individuals.