$12.1M fraud suspect with ‘new face’ arrested, crypto scam boiler rooms busted: Asia Express

08/29/2024

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2024.08.29 20:00

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Our weekly roundup of news from Asia curates the industry’s most important developments.

South Korean manhunt ends as suspect caught with brand new $15K face

South Korean police have apprehended 14 individuals involved in a fraudulent crypto mining scheme that pocketed 16 billion Korean won (about $12.1 million), according to reports citing an Aug. 29 press conference.

Police identified the scheme’s mastermind only as “Mr. A,” (a common practice for suspects before official conviction.) From November 2021 to June 2022, Mr. A allegedly deceived victims by promising an 18% monthly return on investments in the fake crypto mining business.

$12.1M fraud suspect with 'new face' arrested, crypto scam boiler rooms busted: Asia Express A plastic surgery advertisement in South Korea. Source: David Woo, CC BY-ND 2.0 via Flickr

The investigation began after police received 21 complaints from across the country, leading to the arrest of Mr. A and three others in September 2023.

However, Mr. A did not appear at a pre-trial detention hearing, starting a 10-month manhunt.

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

Mr. A’s facial reconstruction is estimated to have cost around 21 million Korean won (approximately $15,900).

He reportedly used multiple burner phones and bank accounts while frequently changing his residence. To launder his criminal proceeds, Mr. A purchased cryptocurrency, which he then cashed out through an accomplice working as a manager at a law firm.

During the investigation, police confiscated 100 million Korean won (about $75,500) in cash from Mr. A’s hideout and seized assets worth 1.3 billion Korean won (around $982,000).

More unusual South Korean crypto news

South Korea is home to one of the world’s largest cryptocurrency markets. In the first quarter of 2024, the South Korean won surpassed the US dollar as the most-traded fiat for crypto transactions.

That comes with a high price as the country faces numerous frauds and scams, prompting some victims to take extreme actions.

On August 28, Hyungsoo Lee, the CEO of crypto yield platform Haru Invest, was stabbed during a court hearing by a man seated in the gallery. Lee was immediately taken to the hospital for treatment.

Lee is on trial for allegedly embezzling $826 million in cryptocurrency from 16,000 Haru users.

Witnesses told local reporters that the attacker was a regular attendee at Haru’s court proceedings and is believed to have deposited approximately 100 Bitcoins with the firm.

In another high-profile incident, following the 2022 Terra-Luna crash, the wife of Terraform Labs CEO Kwon Do-hyung called the police after a man entered their apartment building secured by keypad entry systems, rang their doorbell, and fled.

The man reportedly asked Kwon’s wife, “Is your husband home?” before disappearing.

$12.1M fraud suspect with 'new face' arrested, crypto scam boiler rooms busted: Asia Express

Rival threatens to sue WazirX

Indian cryptocurrency exchange CoinSwitch announced on X that it will take legal action against rival WazirX to recover approximately $9.6 million of its assets trapped since WazirX’s $230 million cyberattack in July.

CoinSwitch tweets that it intends to take legal action against WazirX to recover funds stuck in its rival exchange. WazirX lost about 45% of its funds to the July hack. Source: CoinSwitch

CoinSwitch stated it has “no choice” but to pursue legal measures, as its attempts to recover the funds—which represent about 2% of its total assets—have been unsuccessful.

WazirX also faces a potential asset freeze in India due to a petition filed on August 3, requesting the National Company Law Tribunal to investigate the company for possible fraud.

Meanwhile, WazirX, operated by Singapore-incorporated Zettai Pte through its subsidiary Zanmai India, said it has applied for a six-month moratorium from the Singapore High Court to restructure its liabilities. This would grant the troubled exchange legal protection from creditor enforcement.

The WazirX hack is expected to have larger rippling effects to India’s crypto sector, where the Finance Ministry is expected to release a consultation paper for crypto regulation as early as September, Sathvik Vishwanath, CEO of Indian crypto platform Unocoin, tells Magazine.

“The industry itself is fairly new and none of the countries have cracked the full regulation and its implementation yet,” he says.

Crypto scam targeting Japanese victims uncovered in Malaysia

Malaysian police have shut down a cryptocurrency fraud call center operating out of high-fenced luxury homes in the capital of Kuala Lumpur. The operation is believed to be just a month old.

According to state media Bernama, Investigators said in an Aug. 28 press conference that their raids conducted earlier in the month led to the arrest of 21 individuals, only one of whom was Malaysian.

Malaysia Petronas tower seen at night Police raided high-fenced luxury bungaliws in Kuala Lumpur. Source: Esmonde Yong

The local man managed the operation, while the foreigners worked as customer service agents for the scam.

The scheme targeted Japanese victims through dating applications like Tinder while receiving investments through Japanese crypto platforms Bitbank and CoinCheck.

A week before Malaysia’s bust, authorities in the Philippines arrested 99 individuals after raiding an online scam hub in Manila, the nation’s capital city, according to the government’s Philippine News Agency.

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

The scammers posed as customer service representatives for a gaming company, but in reality, they impersonated wealthy individuals or models to lure victims into investing in fraudulent cryptocurrency projects.

During the raid, police discovered rooms used for staging and filming inappropriate content. They also revealed that some employees had been coerced into participating in the scams and forced to perform seductive acts under duress.

Ronin is more than an Axie chain for Filipinos

The Philippines cryptocurrency exchange Coins.ph has partnered with Australian digital payments platform Stables Money to use PHPC for cross-border remittances.

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

The Aussie payments firm said that 28.44% of its remittance outflows are in Philippine pesos.

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

The World Bank ranked the Southeast Asian nation as the world’s fourth-largest remittance recipient in 2023 with $40 billion, behind India ($125 billion), Mexico ($67 billion) and China ($50 billion).

PHPC can be found on Ronin, a blockchain that has been popularized among local users thanks to Axie Infinity, a non-fungible token (NFT) game that operated as a reliable side hustle for Filipinos during the pandemic.

The stablecoin has a 66.2 million token supply, Ronin blockchain data shows.

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Yohan Yun

Yohan Yun is a multimedia journalist covering blockchain since 2017. He has contributed to crypto media outlet Forkast as an editor and has covered Asian tech stories as an assistant reporter for Bloomberg BNA and Forbes. He spends his free time cooking, and experimenting with new recipes.