A 32-year-old South Korean man, identified only as Mr. A, has been sentenced to five years in prison for scamming a prominent broadcast jockey (BJ) from South Korea of approximately $1.10 million in crypto. The arrest was made in accordance with the region’s budding crypto regulations.
The case, which has captivated the nation’s attention, highlights concern over the surge of crypto-related scams in the country.
Crypto Fraud Escalates in South Korea
Mr. A, who masqueraded as a cryptocurrency expert, first caught BJ’s attention by sending star balloons on a leading livestreaming platform, according to Asia Kyungjae. The BJ, who boasts hundreds of thousands of subscribers on AfreecaTV, initiated contact with Mr. A in 2021 after sharing his struggles with failed investments on the platform.
Shortly after, Mr. A leveraged the BJ’s interest to boast about his 5.1 billion won ($3.80 million) in Bitcoin holdings. He promised BJ returns of two to four times the investment. Trusting Mr. A’s claims, the BJ transferred 1.5 billion won ($1.10 million) to Mr. A, hoping for lucrative returns. However, the BJ soon discovered the grim reality of Mr. A’s deceit.
By January 2022, Mr. A had only returned a fraction of the investment. He only returned 100 million won ($75,000) while similarly defrauding another businessman of 500 million won ($375,100).
Read more: How To Identify a Scam Crypto Project
This high-profile sentencing comes amidst a broader clampdown on crypto scams in South Korea, which boasts a robust crypto user base of 9.73 million as of August 2023. The surge in adoption has coincided with a notable rise in fraudulent activities targeting unsuspecting investors.
Recent incidents, including the police’s warning against crypto influencer scams in social media “investment reading rooms” and the investigation of several South Korean celebrities for their alleged involvement in a crypto fraud scheme, have further spotlighted the issue.
Fraudster Tests New Regulations
The case of Mr. A is particularly significant as it reflects the South Korean authorities’ commitment to safeguarding investors. It also maintains the integrity of the burgeoning cryptocurrency market.
Moreover, it aligns with the country’s stringent Virtual Asset User Protection Act (VAUP). The laws impose severe penalties, including lifetime imprisonment for crypto-related crimes involving gains exceeding $3.7 million. Set to go live in July, VAUP is one step toward South Korea’s goal of combating fraud and protecting investors.
Read more: Crypto Regulation: What Are the Benefits and Drawbacks?
The stringent measures adopted by South Korea, including the recent sentencing of Bitsonic’s CEO Jinwook Shin to seven years in prison for market manipulation, indicate a determined approach to purge the crypto market of fraudulent activities. These actions aim to deter potential rug-pull perpetrators and restore trust in the cryptocurrency sector.
Before Mr. A, several scams and dubious schemes tarnished the industry’s reputation.
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