South Korea: Police Raid Firm Whose Alleged Crypto Scam Promised Investors Shipwreck Gold

Published at: Aug. 8, 2018

South Korean police have raided the office of a local firm whose alleged crypto scam promised investors the spoils of a sunken Russian warship, The Korea Herald reported August 7.

The Seoul Metropolitan Police Agency reportedly sent 27 investigators from its white collar unit to to collect evidence from the premises of Shinil Group in Yeouido, western Seoul, and seven other locations on Tuesday.

In mid-July, Shinil had released submarine footage of what it claimed was the wreckage of the Dmitrii Donskoi, an armored Russian cruiser that sank in 1905 in the midst of the Russo-Japanese war, alleging it had been found beneath the waters off Ulleung Island, east of the Korean peninsula, The Korea Herald writes.

Meanwhile, Shinil’s Singapore-based affiliate is said to have enticed investors to purchase the firm’s own cryptocurrency, Shinil Gold Coin, based on the rumored value of the shipwreck. The company allegedly exploited circulating claims that the ship had gone down with 200 tons of gold worth 150 trillion won (around $134 billion).

At a subsequent press conference, Shinil admitted the reports were unverified, adjusting the figure to 10 trillion won (around $9 billion). At the same time, the firm is alleged to have submitted an internal document to the maritime ministry for excavation approval that estimated the spoils at just 1.2 billion won (around $1 million), The Korea Herald writes.

The firm allegedly further promised investors that the value of the Shinil Gold Coin would skyrocket from its current 200 to 10,000 won (around $0.18 to around $9) by the end of September.

According to a local news report August 1, Shinil Gold Coin has raised 60 billion won (around $54 million) in investments from around 100,000 investors since its launch. Shinil CEO Choi Yong-seok been banned from leaving the country as the investigation continues.

As Cointelegraph previously reported, authorities are also pursuing the head of the firm’s Singapore-based affiliate, Yu Ji-beom, who allegedly created a crypto exchange dubbed Donskoi International and spread posts about the shipwreck on social media. According to his acquaintances, Yu has previously been convicted of real estate fraud and has fled to Vietnam to elude the investigation.

Tags
Related Posts
Crypto Scammers Turn Toward Terrorism With a Japanese Bomb Threat
Crypto terrorists threatened to bomb a government office on the Japanese island of Hokkaido. They told authorities that they would only disable the alleged explosive device if their crypto ransom was paid. According to FNN, the terrorists sent the Numata Town Hall an email stating they had installed a bomb in a women’s second-floor toilet. They claimed that as long as officials met their payment demands before 03:00 UTC on June 29, the bomb would not be detonated. However, this appears to have been a fake threat. The deadline set by the criminals has passed and the hall remains intact …
Bitcoin / July 29, 2020
Russia: Darknet Marketplace Plans $146M ICO for Global Expansion
Russia’s largest darknet marketplace is looking to raise $146 million in a token offering that would allow it to go global. As Forklog reported on Dec. 11, the token sale is almost certainly illegal — in this case not merely for flouting securities laws or other financial regulations. “A new era in the West” The operators of the marketplace, known as “Hydra,” have ambitions to roll out their model of anonymized, rogue trading for illicit substances at a massive scale. An investment memorandum, accessible only via dark web browsers like Tor, claims the platform’s global expansion “will start a new …
Cryptocurrencies / Dec. 13, 2019
South Korea: Crypto Crimes Cost $2.28B Since July 2017
The South Korean Justice Ministry estimates that cryptocurrency-related crimes have caused 2.69 trillion won (about $2.28 billion) of financial damage between July 2017 and June 2019. According to a July 21 report by English-language local media The Korea Herald, the ministry claimed that 132 cryptocurrency-related criminals and fraudsters had been indicted and detained, with another 288 indicted without physical detention during the aforementioned time frame. The report states that, while Justice Minister Park Sang-kim has ordered stern measures against cryptocurrency criminals, a lack of clear regulations on cryptocurrency exchanges has led to an increase in the use of quasi-anonymous or …
Altcoin / July 21, 2019
US SEC Issues Fresh Investor Alert Against Fraudulent Digital Asset Trading Sites
The United States Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have jointly issued an alert warning investors against fraudulent websites purporting to operate advisory and trading businesses. The alert, issued by the SEC’s Office of Investor Education and Advocacy and the CFTC’s Office of Customer Education and Outreach, was published on April 24. The warning states that staff from both agencies have recently observed crypto-related investment scams where bad actors are touting “digital asset or ‘cryptocurrency’ advisory and trading businesses,” in some cases claiming they can invest clients’ funds in special crypto trading systems or …
United States / April 25, 2019
Artificial Intelligence Helps South Korea Police End $18 Million Crypto Ponzi Scheme
South Korean police have arrested suspects behind a cryptocurrency ponzi scheme using artificial intelligence (AI), local English-language news outlet Korea Joongang Daily reported on April 8. The scheme, which reportedly stole a total of 21.2 billion won ($18.3 million) over a six-month period in 2018, came to an end after the Seoul Special Judicial Police Bureau for Public Safety trained robots to catch those involved using keywords and other clues. “Through keywords such as Ponzi, loan and recruiting members, we were able to teach the AI patterns of Ponzi schemes,” Hong Nam-ki, section chief of the bureau’s second investigation team, …
Cryptocurrencies / April 8, 2019