2,600 investors sunk with South Korea’s shipwreck ICO scam: report

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A substantial number of investors in South Korea have reportedly lost well over $8 million in an alleged fraudulent initial coin offering (ICO) involving a phantom shipwreck with a supposed tranche of billions of dollars’ worth of gold on board.

Organizers of the ICO said the proceeds will be used to fund the investigation and retrieval of a Russian ship that sunk during the Russo-Japanese war off the Korean coast and with an alleged $130 billion in gold bounty.

However, a hard knock of reality hit an estimated 2,600 investors who South Korean police said have been duped of around KRW9 billion ($8 million) by the Shinil Group, which claimed to have discovered the ship.

According to the Korea Herald report, the investors poured their money into the so-called Shinil Gold Coin. Buyers of this token were promised to be paid in gold taken from the Russian armored cruiser called the Dmitrii Donski, which had sunk 113 years ago. The ship was loaded with KRW150 trillion ($131 billion) worth of gold, Shinil Group claimed.

Investigators believe the losses could be larger, since the estimates they have come up with are based only on the trading accounts which they have so far managed to track. “If we find more related accounts or confirm cases in which investors used cash, the amount could go up,” the Sophisticated Crime Investigation Unit of Seoul Metropolitan Police Agency said.

There is also a possibility that the victim count could fall according to the Seoul police: “The number of victims could go down, however, if we exclude cases where the same person transferred money using different accounts.”

Initial reports indicated that Shinil Gold has attracted KRW60 billion ($53.7 million) in investments from an estimated 100,000 investors in South Korea since it was launched in 2017. However, the company’s CEO, Choi Yong-seok, already admitted that “there is no firm evidence that the ship contained anything of value.”

A travel ban has been issued on Choi and Seoul’s Gangseo District Police are planning to question him and third parties in connection with the investigation. The scam also allegedly involves Yu Ji-beom, head of a Singapore-based affiliate of Shinil Group, according to the news outlet.

Yu, who reportedly spearheaded the establishment of a cryptocurrency exchange called Donskoi International Exchange, allegedly promoted the supposed shipwreck on different social media platforms. According to his acquaintances, Yu, who was previously convicted of real estate fraud, has fled to Vietnam.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.