South Korean gets prison time for $2m crypto scam promising 50% returns

A South Korean man in his 30s has been sentenced to three years in prison for defrauding a crypto investor of 2.93 billion won (approximately $2.04 million).

The Changwon District Court convicted the man, identified only as Person A, of fraud under the Act on the Aggravated Punishment of Specific Economic Crimes.

He had posed as a wealthy investment expert and lured his victim, met through an online chatroom, by promising to guarantee the principal and provide annual returns of 30 to 50%, according to The Kookje Daily News.

Between December 2021 and August 2023, Person A received funds from the investor on 324 occasions. He claimed the money would be used for cryptocurrency investments, but in reality, he had no assets or employment and had already lost billions of won in previous crypto ventures.

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‘Interest’ payments

To gain the victim’s trust, Person A repaid a portion of the funds as “interest,” effectively using the money in a Ponzi-like scheme.

The court noted that although some funds were returned, the damage could not be considered recovered due to the roundabout method of repayment.

The judge who oversaw the ruling, Judge Kim Seong-hwan, said that the actual profits were far less than the total defrauded amount. It is unlikely the victim will get full restitution.

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