In a shocking turn of events, Byun Young-oh, the CEO of the South Korean tech firm Wacon, has been arrested in connection with a large-scale cryptocurrency scam. The fraud, which revolves around investments in Ethereum, is claimed to have swindled over 500 people, resulting in substantial financial losses estimated at around $366 million.
According to local Korean news outlet, Byun Young-oh and his accomplice Yeom are accused of running a Ponzi scheme disguised as a genuine investment opportunity. They operated through Wacon’s wallet service, MainEthernet, which falsely assured investors that their Ethereum deposits were secure and would yield high returns. The company claimed that investors could earn between 45% and 50% on their investments, drawing in many people, including elderly individuals looking for safe investment options.
Problems surfaced around mid-2023 when investors found they could not withdraw their funds. Despite growing worries, Byun promised that the issues would be resolved within four months. By November 2023, the MainEthernet office in Seoul’s Gangnam District had removed its signage, signaling serious trouble.
The scam has had a particularly harsh effect on elderly investors, many of whom had little knowledge about cryptocurrency. Reports indicate that as many as 12,000 people might have invested with Wacon, underscoring the extensive reach of the fraud.
The Seoul Central District Prosecutors’ Office has charged Byun and Yeom with fraud, and their case is likely to go to trial soon. Investigations are ongoing to identify any additional victims or accomplices, which could further widen the case.
South Korea, a significant player in the global cryptocurrency market, has faced several scams over the years. The arrest of a high-profile CEO like Byun could lead to more stringent regulations aimed at protecting investors.
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