FSS reports an increase in Cryptocurrency Scams in South Korea

The FSS is reporting increase in Cryptocurrency scams in South Korea. Fake companies are duping citizens into investing in them resulting in theft.

By · Aug 4, 2020 . 5min read

South Korea Crypto
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According to the Financial Supervisory Service (FSS), South Korea is experiencing an increase in cryptocurrency fraud. Fake companies claiming to invest in crypto are contacting people in an attempt to scam them. The Financial Supervisory Service (FSS), is reporting a 33% increase in such crimes from last year.

Of the 33% increase, almost all of them were companies posing as virtual currency investors. The shape of the fraud is very much like a Ponzi scheme. The companies offer individuals high rewards if they can further recruit other individuals. Unsurprisingly, the companies do not payout.

The frauds took on various identities. Examples include:

  • Company A claiming to own and operate a mining operation in China, seeking investment.
  • Company B claiming that if the individual invested in their company, they would be eligible for 0.2% of their profits on a daily basis.
  • A third company, C claimed to be a financial institution that dealt with futures and options. It offered individuals the chance to make 20% of profits in 3 months, and so on.

Cryptocurrency Scams are challenging due to False Celebrity endorsements

Many companies also have falsely associated themselves with celebrities to gain credibility. The FSS further stated in respect to Cryptocurrency scams in South Korea:

“Some companies falsely advertised that they were planning to cooperate with a famous celebrity in a public place to hold a large-scale briefing session or to introduce a foreigner to be listed on an overseas exchange or partner with a global company.”

The average age of the victims targeted was 56 years of age. The FSS reports that citizens have lost more than 57 million Won as a result of these scams.

“Most of the damage occurred mainly to middle-aged people who are relatively unfamiliar with the latest financial techniques such as cryptocurrency compared to young people.”

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