Authorities in South Korea and Thailand have successfully toppled a sophisticated international fraud ring that stole $15 million from more than 870 South Korean victims.
The Seoul Metropolitan Police Economic Crime Investigation Division confirmed the arrest of 25 members of the sophisticated international fraud ring known as “Lungo Company.”
At the same time, police in Thailand have detained the ringleader and eight key members of the group and are currently considering extradition back to South Korea.
As opposed to other fraud organizations that normally had only one type of fraud or scam, the Lungo Company used various model types.
Models used by Lungo include, but are not limited to, romance scams, cryptocurrency fraud schemes, and compensation schemes tied to fake lottery winnings to methodically defraud unsuspecting investors.
Fake Platforms and Scam Crypto Sales
Investigators disclosed that victims were manipulated into transferring money into fake accounts or purchasing worthless cryptocurrencies as compensation for their data having been allegedly breached.
The approaches exploited vulnerabilities both emotionally and in terms of trust in the new monetary system.
A police agent explained that the systematic targeting of victims made the groups’ fraud schemes much more misleading and valuable than a traditional cryptocurrency fraud.
The diversity of approaches allowed the group to exploit a broad range of victims within multiple classes of people they could target and intercept, adding richness to the idea of scale and impact together.
Sophisticated Laundering and Chain-Hopping to Evade Detection
Analysts disclosed that Lungo Company used sophisticated laundering techniques to cover its tracks.
Cybercrime consultant David Sehyeon Baek explains that the group used extensive networks of over-the-counter (OTC) brokers in Thailand, especially in tourist areas like Pattaya, to move crypto to fiat without banking scrutiny.
They are also suspected of using “chain-hopping” methods to quickly move piles of assets through different blockchains in order to hide the history of transactions.
Baek added that cross-chain crime has exploded globally in recent years due to decentralized exchanges (DEX) and no-KYC services related to anonymous and untraceable transactions.
Also Read: South Korean Authorities Recover Bitcoin Worth $9.3M From Scammer Targeting Elderly & NK Defectors
Growing Trend of Crypto Crimes in South Korea
The $15 million case is the latest in a string of notable crypto-related crimes in South Korea.
At the end of September, authorities dismantled an international hacking ring that had stolen $28.1 million from wealthy South Koreans, including high-profile public figures and business executives, UnoCrypto reported.
Earlier this year, we reported that six individuals, including a lawyer, were charged in connection with a $7.9 million crypto scam that defrauded over 1,000 investors after manipulating the sale of different tokens.
In March, a Busan court found three individuals guilty of running a $416,000 scheme that pitched 30% monthly returns to investors.
These incidents demonstrate how South Korea is facing an increasingly difficult fight against crypto-related crimes, which has raised alarms about the need for increased regulation, to block unregistered exchanges, and to develop specialized units to investigate different fraudulent activities.
Also Read: South Korean Police Arrest Suspects Behind Major Crypto Airdrop Fraud Worth $4.1 Million