Korean Police Invades Startup Firm for Alleged Fake Gold Cryptocurrency Scam

cryptocurrency scam in South Korea from gold laden ship which sank in the 20th centuryThe police raided the office of a Seoul-based firm following claims that the company was involved in a cryptocurrency scam by promising investors the gold of a 20th-century shipwreck.

According to a local news outlet, 27 white collar investigators from the Seoul Metropolitan Police Agency searched the office belonging to the Shinil Group in Yeouido and also visited seven other locations used by the company for its operations. The search is said to be part of a probe into allegations that the company has been conducting a cryptocurrency scam, defrauding its investors.

Ancient gold used for cryptocurrency scam

The Shinil Group allegedly started a cryptocurrency scam after announcing to potential investors that it had “found the wreck of the Dmitrii Donskoi, a Russian warship that disappeared in 1905 during the Russo-Japanese War.”

Following the weird announcement, the company released footage that convinced investors that the ship had been found beneath the waters off Ulleung Island, east of the Korean Peninsula.

Also, reports circulated that the ship went down with 200 tons of gold, worth around 130 trillion won ($116 billion), leading the Shinil group to exploit the rumors and make illegal crypto gains.

Through a Singapore-based affiliate, the company sold their Shinil Gold Coin based on the potential value of the shipwreck. Many investors were also lured into buying the cryptocurrency because the Shinil group told them that the “coin’s value will jack up to 10,000 won by the end of September this year, from the current 200 won.

The company later told its investors that the quantity of gold that went down with the ship was not up to their first valuation. The new value was then announced to be 10 trillion won (around $9 billion) even though the company had told the maritime ministry for excavation that the estimated value was 1.2 billion won.

CEO banned from leaving

This scam was always going to benefit the group as another local news source reported that the Shinil Gold Coin raised 60 billion won (around $54 million) in investments from about 100,000 investors since its launch.

As further investigations into the cryptocurrency scam continue, Shinil Group chief Choi Yong-Seok has been banned from leaving the country and will likely enter the blacklist of the police alongside “another key suspect surnamed Rhu.”

Mandy Williams is a freelance writer with a keen interest in the crypto and blockchain industry.