South Korean police have seized up to 4.4 billion won worth of cryptocurrency held by a group of illegal crypto exchange operators who are profiting from user platform fees.
According to a news report from Yonhap, authorities have attacked a syndicate that has allegedly attracted hundreds of millions of victories by running fraudulent foreign crypto exchanges. Police have arrested two crypto exchange companies and three operators on charges of violating the Forex Transactions Act and the Electronic Financial Transactions Act.
“Through the accounts and virtual assets tracking, searching and seizures, we have recovered and saved about 12.4 billion won on assets held by Money Changer operators and businesses in other people’s names,” police wrote in a statement.
In the attack, authorities confiscated $3.2 million in Ethereum (ETH) stored in a crypto wallet by the suspect. The perpetrators reportedly tried to wash them from investigators in the hopes of hiding it.
The group reportedly has illegally performed crypto exchanges by receiving money from potential customers and manually replacing them through another exchange called Nettel Pay for the past six years.
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Authorities confirmed that three unregistered money changers have used cryptocurrency exchange fraud technology to trade a total of 943.4 billion won. The amount of transactions accumulated from illegal operations amounts to approximately $694.5 million.
From the platform fees, the Korean group was able to raise up to 25.7 billion wins, or about $1,892 million.
Through the investigation, the prosecutor confirmed that the funds received from victims of fraud had been converted to Nettel pay and used by overseas gambling sites and began the investigation.
In February, South Korean prosecutors launched a dedicated joint investigation unit on crimes related to virtual assets. The unit is primarily composed of the Financial Services Commission and the Financial Supervisory Services prosecutors and financial regulators.
read more: South Korea has launched its official crypto crime prosecutor’s division
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