South Korea hit by massive cryptocurrency MLM scam, fake platform "V Global" swindles $360 million

This year, South Korea experienced a massive cryptocurrency scam where the exchange "V Global" used a multi-level marketing scheme to attract nearly 70,000 members, resulting in a staggering $3.6 billion USD in losses. The criminal investigation unit has intervened, but some victims, convinced of receiving high returns, are refusing to report to the authorities, which seems to impede the investigation.

V Global Scam Exchange

According to the local media Economy Daily, the South Korean criminal investigation unit intervened in May, investigating allegations that the 31-year-old CEO and executives of V Global were involved in selling cryptocurrency through a multi-level marketing scheme.

In May, prosecutors accused V Global of illegally recruiting 40,000 members since 2020, each required to invest at least 6 million Korean won, with profits reaching 1.7 trillion Korean won or 1.53 billion US dollars.

On 6/8, the South Korean JoongAng Daily reported that the number of members has reached 69,000, with profits totaling 3.85 trillion Korean won or 3.6 billion US dollars. The report stated that V Global appears to be an exchange but is actually promoting multi-level marketing and fund management schemes, promising a threefold profit on a 6 million Korean won investment after three months, and offering a referral bonus of 1.2 million Korean won.

"Robbing Peter to Pay Paul" Scheme Collapses

However, some members did not receive the promised bonuses from V Global, and the number of reported victims continues to rise. On 5/15, prosecutors applied to confiscate 240 billion Korean won held by V Global and officially filed charges.

As the case unfolds, there seems to be a significant gap between the amount held by prosecutors and the defrauded amount. The exchange appears to be operating normally, and has issued statements claiming that reports from law firms are false, and they plan to take further legal action for defamation and business interference.

Belief in "Quick Profit" Persists

During the investigation, prosecutors encountered obstacles as some victims refused to report to the police. One man told prosecutors:

"My mother was defrauded of 13 million Korean won. I have advised her to report it, but she believes she will eventually receive three times the investment profit, just like the exchange initially promised her, so she refuses to report it."

The man also pointed out that on 6/2, V Global informed his mother that the exchange was not under police investigation and asked her to sign a document to prove she was not defrauded.

He believes this is just a way for V Global to buy time, continuously asking investors to remain quiet and wait, to prevent them from reporting to the police.