South Korean Crypto Traders ‘Duped into Joining Money Laundering Scams’

Fraudsters are targeting South Korean crypto traders with sophisticated scams that help criminals launder money, police claim.

Per a report from the South Korean media outlet CBS NoCut News, scammers are luring crypto wallet holders with offers of “part-time” crypto trading “jobs.”

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The media outlet wrote that officers are dealing with a “series of cases” that involve “voice phishing organizations” that “abuse” crypto to “launder criminal funds.”

Busan Saha Police Station in Busan, South Korea. (Source: hyolee2 [CC BY-SA 3.0])

Police in Busan, South Korea’s second city, gave the example of an unnamed man (referred to as “A”) aged in his 20s.

A, officers, arrived at a police station in Busan with a lawyer, “claiming that he had been involved in a voice phishing crime” while “working part-time.”

A told the police that he had responded to a “part-time work advertisement on Instagram” calling for people with crypto wallets.” The trader said that he responded to the posting “out of curiosity.”

A explained that a “company” then “immediately hired him” and “instructed him to buy cryptoassets on their behalf.”

The company did not conduct any “face-to-face interviews,” police said, and “all work-related conversations were conducted strictly on the Telegram chat app.”

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A said he thought he had been hired to work as as “cryptocurrency purchasing agent.” He explained how he used his own crypto wallets to make purchases for the company “for a few days.”

However, he began to suspect something was amiss when his “account was suddenly suspended.”

A said that he had been “surprised” by the suspension and then began to look into the matter.

The trader insisted he thought he was working for a bona fide company. He added that the person who “hired” him had shown A realistic-looking “documents.” He explained:

“At first I had no idea this firm was related to criminal activities.”

A said he had executed some 300 million won ($204,415) worth of trades for the company in a week.

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Police officers think that the trader took money from the “company.” A then allegedly used the funds to buy crypto, sending the coins onto the alleged criminals’ crypto wallets.

This money, officers say, was “laundered money” raised from “voice phishing schemes.”

Officers said they have pressed charges against A, but added they were still “investigating the exact circumstances” of the case.

Police said that they were now dealing with a rising number of similar cases, which mainly appear to “target people in their 20s and 30s.”

Criminals, officers added, “recruit” victims by “posting advertisements” for “high-paying part-time jobs” and “crypto purchasing agents” on social media platforms such as Instagram and Telegram open chat rooms.

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Typically, officers said, criminals offer to give “applicants” between 2% and 3% of each trade’s worth “as a commission fee.”

The organizations instruct traders to conduct crypto transactions on overseas-based crypto exchanges.

They then tell “agents” to send coins to crypto wallets, which are also similarly “located overseas.”

This process eventually makes it “difficult” for investigators to “trace” the flow of funds.

Gwanganli Beach, Busan, South Korea. (Source: Carey Ciuro [CC BY 2.0])

A spokesperson from Saha Police Station in Busan explained:

“Voice phishing scams that make use of crypto have existed for a while. However, recently, we have recently seen a rise in this new type of crime. It is difficult for us to monitor funds on overseas exchanges or wallets, because their operators do not always fully cooperate with our investigations.”

The spokesperson warned that even in cases where crypto-keen citizens are “unaware” they are working with money launderers and other fraudsters, legal risks are high. The official concluded:

“Citizens could be prosecuted for aiding and abetting fraud in these cases, so we urge caution.”

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