South Korean police arrest YouTuber, 11 others in $231M crypto fraud case

More than 15,000 investors affected by fraud involving 28 virtual assets in complex scheme led by influential YouTuber.

Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.

South Korean police have arrested 12 suspects, including a prominent YouTuber, in connection with a $231 million crypto fraud that affected more than 15,000 investors, local media outlet Yna reported.

The report stated that this arrest is part of an extensive investigation, initially leading to the apprehension of 215 individuals, with 12 ultimately detained for their roles in the scheme.

According to the police, the YouTuber referred to as Mr. A orchestrated a scheme that defrauded over 15,000 people out of 325.6 billion won (approximately $231.5 million). The group allegedly lured investors by selling 28 different virtual assets as part of an investment scheme from December 2021 to March 2023.

With a following of around 620,000 subscribers, Mr. A ran a pseudo-investment company, promising lucrative returns through virtual asset sales. These assets were marketed to raise funds, primarily to fulfill refund requests from previous members who suffered losses from a failed 2020 stock investment on Mr. A’s recommendation.

To support the scheme, Mr. A established six consulting firms, ten sales corporations, and 15 other organizations under his company, dividing operations across several roles. These included management, coin issuance, price manipulation, database handling, coin sales, and money laundering.

The group reportedly promised investors returns as high as 20 times their initial investments. However, police investigations showed that of the 28 virtual assets sold, only six were created by Mr. A’s team.

These tokens were listed on international exchanges through brokers, where the group inflated prices by purchasing them internally before selling them to investors. The remaining 22 tokens were not self-issued and had low trading volumes and limited market value.

The investigation began in February 2023 after a police report was filed locally, leading to a detailed analysis of 1,444 accounts to trace fund flows.

Authorities later apprehended Mr. A in Australia, where they also confiscated 22 Bitcoin from him. Police are now pursuing further asset recovery, with applications filed to reclaim 47.8 billion won, estimated at around $34 million.