‘Rookie’ $12.1M fraud suspect arrested, cryptocurrency fraud boiler room exposed: Asia Express

We round up the weekly news from across Asia, highlighting the most important industry trends.

Manhunt ends in South Korea as suspect caught with $15,000 new face

According to a report citing a press conference on August 29, South Korean police have arrested 14 people involved in a cryptocurrency mining scam that netted 16 billion won (about $12.1 million).

Police have identified the mastermind behind the scheme only as “Mr. A” (a common practice for suspects before they are formally convicted). Mr. A is accused of defrauding victims by promising them 18% monthly returns if they invested in a fake cryptocurrency mining operation between November 2021 and June 2022.

Police began an investigation after receiving 21 complaints from across the country, and arrested three people, including Mr. A, in September 2023.

However, Mr. A did not appear for the pre-trial detention hearing, and a 10-month pursuit began.

He was finally arrested in July 2024 after undergoing multiple plastic surgeries, including eyelid, nose, and facial contouring surgeries, to avoid detection.

Mr. A’s facial reconstruction surgery is estimated to cost around 21 million won (about 15,900 dollars).

He was known to have used multiple burner phones and bank accounts while frequently moving residences. Mr. A purchased cryptocurrency to launder the proceeds of his crimes, then cashed it out through an accomplice who worked as an administrator at a law firm.

During the investigation, police confiscated 100 million won (approximately $75,500) in cash and 1.3 billion won (approximately $982,000) worth of property from Mr. A’s hideout.

More unique Korean cryptocurrency news

South Korea has one of the largest cryptocurrency markets in the world. In Q1 2024, the South Korean won surpassed the US dollar as the most traded fiat currency in cryptocurrency trading.

These scams are taking a heavy toll as the country faces a plethora of frauds and scams, with some victims taking extreme measures.

On August 28, Lee, the CEO of cryptocurrency profit platform Haruinvest, was stabbed with a knife by a man sitting in the courtroom during a court hearing. Lee was immediately taken to the hospital for treatment.

He is on trial for allegedly embezzling $826 million worth of cryptocurrency from 16,000 daily users.

Witnesses told local reporters that the attacker was a regular at the one-day trial and is believed to have deposited around 100 bitcoins into the company.

Another notable incident occurred after the 2022 Terra Luna crash, when the wife of Terraform Labs CEO Kwon Do-hyung reported to the police that a man entered their apartment secured with a keypad entry system, rang the doorbell, and ran away.

The man reportedly asked Kwon’s wife, “Is your husband home?” and then disappeared.

Rival threatens to sue WazirX

Indian cryptocurrency exchange CoinSwitch has announced that it will take legal action against its rival WazirX to recover approximately $9.6 million in assets seized following a $230 million cyberattack in July.

CoinSwitch said it had “no choice” but to take legal action after attempts to recover funds worth around 2% of its total assets failed.

WazirX is facing an asset freeze in India due to a petition filed on August 3, asking the National Company Court to investigate the company’s alleged fraud.

Meanwhile, WazirX, which is operated by Singapore-based Zettai Pte through its subsidiary Zanmai India, said it has applied to the Singapore High Court for a six-month moratorium to restructure its debts, giving the troubled exchange legal protection from creditor enforcement.

The WazirX hack is expected to have wider ramifications for the Indian crypto sector, with the country’s finance ministry expected to release a consultation paper on crypto regulation as early as September, Satvik Vishwanath, CEO of Indian crypto platform Unocoin, told the magazine.

“The industry itself is still relatively new and no country has yet established full regulations and enforcement,” he said.

Cryptocurrency Scam Targeting Japanese Victims in Malaysia

Malaysian police have shut down a cryptocurrency scam call center operating from a high-rise residential building in the capital Kuala Lumpur, believed to be just over a month old.

According to state-run news agency Bernama, investigators told a news conference on August 28 that 21 people were arrested in a raid earlier this month, of whom only one was Malaysian.

Local residents managed the fraud operations and foreigners served as customer service representatives.

The scam targeted Japanese victims through dating apps like Tinder, and received investments through Japanese cryptocurrency platforms Bitbank and Coincheck.

A week before the Malaysian crackdown, Philippine authorities raided an online fraud site in the capital Manila and arrested 99 people, the government’s Philippine News Agency reported.

The raid targeted “AIA Company,” a company that was not registered locally and falsely presented itself as a licensed overseas gaming operator.

The scammers pretended to be customer service representatives for a gaming company, but in reality they were wealthy individuals or models, luring victims into investing in fraudulent cryptocurrency projects.

During the raid, police found a room used to produce and film inappropriate content. They also revealed that some employees were forced to participate in the scam and were forced to perform seductive acts under duress.

Ronin is not just a simple axe chain to Filipinos.

Philippine cryptocurrency exchange Coins.ph has partnered with Australian digital payments platform Stables Money to process cross-border remittances using PHPC.

PHPC is a cash-backed stablecoin pegged to the Philippine Peso.

The Australian payments company said 28.44% of remittances were in Philippine pesos.

The Philippines is one of the world’s largest remittance recipients.

The World Bank has ranked Southeast Asian countries as the world’s fourth-largest remittance recipients, with $40 billion in 2023, second only to India ($125 billion), Mexico ($67 billion), and China ($50 billion).

PHPC can be found on Ronin, a blockchain that has become popular among local users thanks to Axie Infinity, a non-fungible token (NFT) game that has been a steady sideline for Filipinos during the pandemic.

According to Ronin blockchain data, the stablecoin’s token supply is 66.2 million.

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Yoon Yohan

Yohan Yoon is a multimedia journalist covering blockchain since 2017. He has contributed as an editor to Forkast, a cryptocurrency media outlet, and has covered Asian technology stories as an assistant reporter for Bloomberg BNA and Forbes. In his free time, he enjoys cooking and experimenting with new recipes.