The CEO of a prominent South Korean technology company, Wacon, has been apprehended under suspicion of orchestrating a large-scale cryptocurrency scam that preyed upon more than 500 investors.
Byun Young-oh, the CEO, along with his partner Yeom, allegedly devised a Ponzi-style scheme using a platform called MainEthernet. Wacon, which boasts approximately 12,000 members, is believed to have operated as a Ponzi scheme or a multi-level marketing campaign. The company offers virtual currency staking products, including tipping and mainnet businesses, without obtaining the necessary registration from financial authorities. It operates branches across South Korea.
The scam, estimated to have accumulated a staggering $366 million, primarily targeted elderly individuals, who were promised interest rates ranging from 45% to 50% on their Ethereum (ETH) deposits.
The platform, which functioned as a digital wallet service, enticed investors with guarantees of secure and highly profitable returns. However, by mid-2023, reports started surfacing that investors were unable to withdraw their funds.
Despite these concerns, Byun reassured investors that the issues would be resolved within a few months. However, by November 2023, signs of the company’s impending collapse became evident when MainEthernet’s office in Seoul removed its signage.
The Seoul Central District Prosecutors’ Office has officially charged Byun and Yeom with fraud, and the case is expected to proceed to trial in the near future.
Prosecutors are currently conducting an ongoing investigation to determine the full extent of the scheme. They are actively seeking to identify additional victims and potential accomplices. Byun vehemently denies any involvement in a Ponzi scheme, claiming to be unaware of such structures. The investigation remains ongoing.
This report was made possible with the assistance of local media outlets Cheonji Daily and iNews24.
In other news, Thailand has introduced a sandbox environment to facilitate the testing of cryptocurrency services.