South Korea Seizes $3.2 Million in Cryptocurrency from Fake Exchange Operators

South Korean authorities have successfully seized approximately $3.2 million worth of cryptocurrency from operators of fake crypto exchanges. The operation targeted a syndicate that had been collecting hundreds of billions of won through fraudulent activities. The authorities arrested two crypto exchange firms and three operators on charges of violating the Foreign Exchange Transactions Act and the Electronic Financial Transactions Act.

The investigation involved tracking accounts and virtual assets, leading to the recovery and preservation of around 12.4 billion won in assets held in other individuals' names by money changer operators and corporations. The seized cryptocurrency, valued at $3.2 million, was primarily in Ethereum (ETH) and was found within the suspects' crypto wallets. The group had been operating these illegal exchanges for the past six years, receiving money from potential customers and manually exchanging it through a separate exchange called Nettel Pay.

The investigation revealed that three unregistered money changers had transacted a total of 943.4 billion won using cryptocurrency exchange fraud techniques. The group managed to raise approximately $18.92 million from platform fees alone. The funds received from victims of the fraud were converted into Nettel Pay and used on overseas gambling sites, prompting the prosecution to launch an investigation.

This operation highlights the growing concern over cryptocurrency-related fraud and the need for stringent regulatory measures. In February, South Korean prosecutors established a dedicated joint investigation unit for crimes related to virtual assets. This unit, comprising prosecutors and financial regulators, aims to enhance the enforcement of laws and regulations governing virtual assets, ensuring that fraudulent activities are swiftly addressed and perpetrators are brought to justice.