South Korea crypto scam promises investors shipwreck gold

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Authorities in South Korea are investigating an alleged cryptocurrency investment scam involving Seoul-based Shinil Group as the key figure, the Korea JoongAng Daily reported.

According to investigators, Shinil claimed to have found a 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, and the South Korean company promised its investors that they will be paid in gold taken from the shipwreck if they purchase Shinil’s own cryptocurrency, the Shinil Gold.

Since its launch last year, Shinil Gold has attracted KRW60 billion ($53.7 million) in investments from an estimated 100,000 investors in South Korea. However, the company’s CEO, Choi Yong-seok, recently 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.

It is also possible that suspects from the Shinil group have attempted to profit from fluctuations in the share prices of Jeil Industries, according to investigators. Last July 17, shares of the South Korean manufacturer spiked by 30% after Shinil Group’s former head, Ryu Sang-mi, became the second largest shareholder in the Jeil Steel. Jeil claimed that it was not related to Shinil’s ship salvage project when the prices fell next day.

The news out of South Korea comes on the heels of another alleged crypto scam in Vietman. Last week, cryptocurrency investors in Vietnam were up in arms after they found that Le Minh Tam, CEO of crypto mining firm Sky Mining, fled with $35 million in investor and company funds.