South Korean prosecutors in the city of Daejeon have busted what appears to be a USD 18.4 million multi-level pyramid scheme centering around a fake token.
Per news agency Yonhap, police say that executives from at least one unnamed company convinced “a large number of investors” to invest in an as-yet-unnamed token that officials named only “H coin” to part with their money. Neither the name of the company nor the token in question have been released to the media for legal reasons.
Investors were told that tokens worth as little as USD 0.0034 would skyrocket in value once the token was listed at major exchanges, trading for USD 4.3 apiece.
In classic pyramid style, investors were also encouraged to recruit more buyers, and were told they would receive a greater share of future profits if they brought in more investment.
The investors were told that the H coin was the brainchild of a Thailand-based fintech company, and were shown convincing-looking promotional material featuring foreign actors. Fake read-outs pertaining to H coin prices, fake transaction data and bogus crypto exchange information was also produced in an effort to dupe investors.
A court in the city heard that the H coin white paper is still extant and can be found online.
However, prosecutors have since discovered that the company in question was nothing but a shell – and that no H coin had ever been issued.
The scheme appears to have been exceptionally sophisticated, and its operators ran their campaign from August 2017 to July last year.
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