A district court in Busan, South Korea, has sentenced three fraudsters for orchestrating a cryptocurrency investment scheme that misled investors with false promises of high returns. The ringleader received a four-and-a-half-year prison sentence, while his two accomplices were sentenced to three and a half and two and a half years respectively.

Promised Returns That Never Existed

The scam took place in June 2019, when the trio claimed to use a proprietary algorithm that could deliver monthly returns of up to 30%. They attracted investors by promising to trade over 1,000 “high-quality coins” from around the world.

In reality, no such algorithm existed—the funds collected were instead used for personal expenses. The total fraud amounted to 610 million Korean won, or approximately $416,000.

Court: Exploiting Public Crypto Enthusiasm

In his ruling, the judge emphasized that the defendants took advantage of the public’s growing interest in cryptocurrency investments to deceive and exploit unsuspecting individuals. He added that such conduct undermines trust in the financial system and deserves strict punishment.

The case reflects South Korea’s increasing crackdown on crypto-related crime, which has been on the rise in recent years.

South Korea’s Crypto Boom Attracts Both Investors and Fraudsters

South Korea is experiencing a crypto investment boom: as of February 2024, more than 16.29 million people were involved in crypto trading—nearly 32% of the country's population. Data from the five largest local exchanges—Upbit, Bithumb, Coinone, Korbit, and Gopax—shows consistent growth throughout the year.

After Donald Trump’s election as U.S. president in November 2024, an additional 500,000 investors entered the market. By March, the number of active crypto accounts surpassed 15 million.

Public Officials Invest in Crypto Too

Interestingly, a recent report revealed that 1 in 5 South Korean public officials who submitted asset disclosures owns cryptocurrency. Out of 2,047 officials, 411 disclosed direct crypto holdings or investments.

South Korea Ramps Up the Fight Against Crypto Crime

To combat the rising number and complexity of crypto-related scams, South Korea’s Seoul Southern District Prosecutors’ Office has launched a permanent joint investigative unit (JIU) dedicated exclusively to virtual asset crimes.

The unit includes 35 full-time experts, including prosecutors and financial regulators from the Financial Services Commission and the Financial Supervisory Service. It is led by Chief Prosecutor Park and two senior deputies. Originally created as a temporary task force in 2023, the team was formally established due to the rapid rise in crypto fraud cases.

Message to Scammers: Crypto Crime Won’t Be Tolerated

Legal experts say the verdict sends a strong message to potential fraudsters—crypto-related crimes are taken seriously. South Korea continues to strengthen its role as a leader in crypto regulation, prioritizing investor protection and market integrity.


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