Man commits $60 million scam with false cryptocurrency promises

• Cryptocurrency Ponzi Scheme Affected 2.200 Elderly Investors
• Promises of 300% return with crypto and artificial intelligence
• Scammer operated while serving time for previous fraud

A South Korean man in his 60s was arrested for run a Ponzi scheme of US$60 million involving promises of high profits from investments in cryptocurrencies and artificial intelligence. The operation defrauded more than 2.200 people, mainly between the ages of 50 and 70, a group with little familiarity with crypto technologies.

The fraudster, identified only as Mr. A, had already been serving a suspended sentence for involvement in another financial fraud since July 2021. However, between October 2020 and January 2022, he returned to active operations with the support of six accomplices. The group held promotional events in Seoul's Gangnam district, claiming to offer opportunities in AI and crypto assets with promised returns of up to 300%.

The amounts invested ranged from US$770 to US$770.000 per person. The operating model followed the classic pyramid scheme pattern: funds from new investors were used to pay supposed profits to existing participants, sustaining the scheme until its inevitable collapse.

To keep the structure running, Mr. A involved family members and acquaintances in various areas of the operation, including finance, marketing, IT, and recruitment. After the investigation began in September 2022, the suspect fled, sparking a two-month manhunt.

Police emphasized that the case involved irreversible losses for many of the investors, underscoring the severity of the crime. "Ponzi schemes are crimes that deserve severe punishments, as they result in numerous victims and make it impossible to recover losses," a police spokesperson said.

The case rekindles the alarm about fraud involving crypto assets and reinforces the need for increased vigilance, especially among audiences less familiar with the cryptocurrency market and its associated technologies.