South Korean police have raided a suspected “fake crypto mining” operation that pretended to offer investors profits from mining Cardano (ADA) and other tokens, officers in Incheon announced on June 3.
According to Yonhap, police in the city of Incheon arrested a group of 13 people arrested, with seven held in custody on “organized crime” charges. The remaining six were released on police bail.
‘Fake Crypto Mining’ Ring Busted
Police at the Incheon Central Police Station in the Jung-gu District presented evidence obtained from the raids. These included mobile phones, laptop computers, and bundles of cash.
Officers said the group promised “victims” they could make “big profits” by investing in crypto mining “machines.”
They said the group duped investors out of around $518,000. The group was allegedly masterminded by two individuals, both aged 29.
Police said the group tricked 69 people aged “in their 30s to 60s” and operated from February 14 to March 4 this year.
This duo appears to have created a “call center” that contacted people using a darkweb “personal information database.”
The group, police said, appears to have bought the data from a Telegram-based vendor, paying its vendors in Bitcoin (BTC).
This database appears to have contained the names of crypto-keen citizens. The “call center” employees rang the citizens, telling them they were eligible for a “VIP promotional offer.”
Suspects Planned to Strike Again, Police Say
The employees, police said, told the alleged victims they could buy crypto mining rigs “at a low price.”
The operators appear to have told investors they could buy machines that they could pay a “company” to operate remotely on their behalf.
Higher stakes, they told investors, would result in higher hashrates and more “guaranteed” profits.
Police released photos of what appear to be fake crypto wallets for tokens such as ADA, Ethereum (ETH), and Solana.
When police began to investigate, the alleged masterminds spent “a month trying to avoid capture by investigators.”
Officers said the masterminds ditched the phone line they had used to contact potential victims. They also “deleted the internet site” they had used, emptied their offices, and closed bank accounts.
Police said the group all hailed from the same neighborhood, but “formed a criminal group and committed their crimes in a planned manner.”
Police Confiscate Luxury Goods
Officers added that some of the group were “confirmed members of violent gangs” active in Seoul and Incheon.
Investigators said they found drugs and a “syringe” at one of the alleged gang member’s homes.
Officers have also frozen assets worth some $88,000, and asked a court to block a further $360,000.
Police officials said that they also confiscated luxury goods from the home of one of the “masterminds,” as well as an expensive vehicle.
An Incheon Central Police Station spokesperson said:
“After committing this crime, the group established a new office and was preparing to commit more offenses. We are supporting victims in their attempts to recover their funds.”
Last year, police noted a sharp rise in crypto mining-themed dating scams, whereby victims are encouraged to invest in overseas-based mining projects.