The Seoul Metropolitan Police Agency’s Financial Crimes Unit recently uncovered a massive cryptocurrency investment scam that deceived around 10,000 individuals, particularly elderly women, with promises of high returns. The scheme accumulated a total of 500 billion KRW (approximately 375 million USD) through a network of fraudulent investment activities. Forty senior executives of the investment company “Wacon” were referred to the prosecution without detention on charges of fraud and violations of the Unauthorized Collection Act, while the company’s CEO, Mr. A, and other key members have been in custody since July and are currently on trial.
According to police investigations, from 2022 through 2023, Wacon hosted investment seminars across South Korea, promising that deposits in virtual assets would be invested in high-yield overseas casino businesses, with a 20% interest payout along with the principal amount to be returned after 40 days. To gain investors’ trust, Wacon created a fake deposit website, designed to show investment deposits and accrued interest as if the funds were actively managed and profitable. However, these figures were merely manipulated, with no actual investments being made. Instead, all deposited funds were funneled into Mr. A’s personal accounts and digital wallets, where they were spent on luxury yachts, high-end watches, and real estate, among other personal expenditures.
The majority of the victims were in their 60s or older, with nearly 70% of them being elderly women, many of whom were introduced to Wacon through personal acquaintances. The company’s referral system paid existing investors a 10% commission on new investments they brought in, rapidly expanding the scheme’s reach. Individual losses were as high as 9.2 billion KRW (around 6.9 million USD), while the total amount defrauded reached 506.2 billion KRW. In its early stages, Wacon built trust by paying back some initial investors, creating an illusion of success; however, in June of last year, the firm stopped payments as the pyramid scheme became unsustainable. Unable to fulfill the promised returns, the scheme collapsed.
The police conducted extensive raids on Wacon’s headquarters and branches across the country, seizing luxury watches and other high-value items worth millions of KRW from the homes of key figures involved. They have seized and frozen assets worth around 10.1 billion KRW, although nearly half of the total funds—approximately 270 billion KRW—remain unrecovered. A police spokesperson warned the public, advising that “investment plans promising high returns with guaranteed principal are often fraudulent, so caution is necessary.”
The Wacon case highlights the vulnerability of elderly investors, many of whom fell prey through trusted acquaintances, exposing the heightened risks that seniors face with high-yield investment scams. Police continue to investigate the financial network tied to Wacon, hoping to uncover further assets and aid in recovering damages for the victims.
