Byun Young-oh, CEO of the South Korean technology firm Wacon, has been arrested for his alleged role in a massive Ethereum-based scam. The scheme defrauded over 500 investors, totaling around $366 million. Byun, along with an alleged accomplice named Yeom, face serious fraud charges. Currently, both are in custody and will be tried by the Fifth Criminal Division of the Seoul Central District Prosecutor’s Office.
Based on the iNews24 report on 12 August 2024, the scam was associated with MainEthernet, operated by Wacon. This platform offered very high returns on investments, with interest rates between 45% and 50%. The scheme was characterized by the prosecutors as a classic example of a Ponzi scheme. It attracted more than 12000 investors, most of whom were elderly people with an average age of over 60. Some of these victims were said to have little knowledge of the dangers posed by cryptocurrencies.
Byun Young-oh Denies of Ponzi Scheme in Ongoing Investigation
Byun has denied any involvement in a Ponzi scheme, saying in a November 2023 statement that he did not know the term or structure of multi-level marketing. The police are still searching for more victims and other suspects in connection with the case.
The case has received broad coverage in the South Korean media. Some sources claim that investors have been unable to withdraw their money from MainEthernet since the summer of 2023. The company shut down the MainEthernet office in Gangnam district, Seoul, in November 2023, adding to the scam’s effects.
Cryptocurrency scams are also on the rise globally. For example, the Enforcement Directorate in India recently conducted searches in connection with the scam involving fake cryptocurrency, Emollient Coin. At the same time, Operation Spincaster in Australia has identified over 2,000 compromised crypto wallets, as the FBI has reported an increase in scam attempts when Bitcoin prices are falling.
Conclusively, these international campaigns make it very important for governments and organizations to come up with strict policies and collaborate to safeguard investors against crypto scams.
