Police in South Chungcheong Province are investigating a criminal group suspected of producing counterfeit South Korean won banknotes and using them to defraud virtual currency traders during face-to-face transactions.
According to Chosun Ilbothe group was found to be in possession of 9,188 counterfeit 50,000 won banknotes worth about 459.4 million won (approximately $330,000) last year. Investigators said the suspects used color printers to print invoices and contacted virtual currency traders online to arrange in-person exchanges of digital assets for cash.
The scheme unraveled during a meeting in Asan when a potential victim noticed the poor quality of the banknotes and refused to complete the transaction, calling police instead.
The use of counterfeit cash in cryptocurrency transactions is not new. Such scams take advantage of the speed and informality of face-to-face transactions, where large amounts of funds can be exchanged quickly and verification of banknotes can be limited. A spate of similar incidents last summer, especially in Hong Kong, shows how counterfeit currency is a recurring risk in the over-the-counter cryptocurrency market.
In a July 2024 incident in Hong Kong, police arrested three people on suspicion of defrauding a businessman of $400,000 in USDT in the popular business district of Mongkok. Officers seized more than 11,000 counterfeit banknotes during the raid, more than the total number of counterfeit banknotes seized in Hong Kong in the entire previous year.
Two months ago, police in the same region arrested three staff members of a cryptocurrency exchange for allegedly defrauding customers of HK$128,000 ($16,000) in USDT and cash transactions. To deceive their victims, the suspects used counterfeit “Hell Money” bills printed on joss paper, which is traditionally burned in rituals, and easily available in Hong Kong stores.
In the South Korean incident, three men in their 30s and 40s, named Mr. A, Mr. B, and Mr. C, were arrested in connection with this plan. Police arrested Mr. A and Mr. C in October and November last year, and Mr. B fled to Cambodia. An Interpol Red Notice was issued for his arrest, and he was detained on November 5 this year when he re-entered South Korea from China through Incheon Airport.
According to investigators, the suspects said they committed the crime to cover living expenses while unemployed.
Mr. A and Mr. B were indicted, but Mr. C remains under investigation as the original court warrant was denied. Police say they plan to reapply once additional investigation is complete.
Officials involved in the incident were commended by the Bank of Korea on Friday for their efforts in preventing the spread of counterfeit cash. The central bank, which awards the prizes twice a year, said the team had made a significant contribution to catching the counterfeiters.
In a statement, the bank urged the public to carefully inspect cash in well-lit areas, check for hologram movement when counting bills, and immediately report suspected counterfeit bills. He also mentioned a revamped counterfeit detection app as a tool to verify banknotes.
The incident comes amid a widespread increase in crimes related to face-to-face interactions. Over the past year, authorities and security experts have warned of an increase in so-called “wrench attacks,” physical assaults aimed at forcing victims to unlock their cryptocurrency wallets or transfer money.
Jameson Ropp, chief technology officer at crypto security firm Casa, has recorded at least 66 crypto-related physical assaults by 2025, including kidnappings and home invasions targeting investors, influencers, and even their families.
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