The crackdown on cryptocurrency-related pyramid scams continues, this time featuring alleged swindlers from South Korea.
On Thursday, an Incheon District Court judge has fined two men accused of using a pyramid scheme involving fake virtual currencies to reap $20 billion from South Korean investors, Yonhap reported.
The two men, which initially received KRW26 billion ($24 million) from investors, built an illegal multi-level company that promised high returns for those who would invest in SegWit-Coin BTC (also referred to as Bitcoin legacy or Core).
One of the suspects is a 51-year-old man based in the Philippines, according to the report. That man, who served as head of the multi-level company, is allegedly in the Interpol watch list. In South Korea, he is facing a fine of $15 million for the alleged pyramid scheme, while his 62-year-old cohort is ordered to pay $8 million in fine.
“The multi-level transaction is a risk to the socioeconomic order with mass production of many victims,” said Judge Hwang Jin-jin, of the Incheon District Court 14.
Authorities across Asia have been beefing up their efforts in clamping down multi-level marketing schemes that bank on the surge of popularity of cryptocurrencies like SegWit-Coin BTC. This week, police in China arrested four people in the city of Xi’an who were accused of conning some 13,000 individuals out of $13 million in supposed investments. Investigators said the scam, which started in October 2017, revolved around the Da Tang Coin (DTC), an altcoin linked to a company called DTC Holding.
In the Philippines, a couple was charged with scamming 50 people into investing in SegWit-Coin BTC in 2017. Police said the husband-and-wife team convinced their victims to invest in a company called “NewG,” promising a 30% return on their investments every 15 days. The couple amassed an estimated $17 million from this scheme.