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South Korean police shut down the network on an alleged Ethereum (ETH) scam operation called EtherWallet, making “dozens” of arrests nationwide for suspected $ 44.5 million fraud. About 3,000 victims have been identified, police said.
The Seoul Metropolitan Police Agency formally investigated EtherWallet since early summer this year, after a group of hundreds of investors filed a first police report in January.
EtherWallet operators would use multilevel marketing (MLM) tactics to recruit members, promising investors lucrative rewards for merging their ETH holdings into what they claimed was a mutual fund.
Police initially believed around 1,500 investors had been duped by their crypto holdings, but according to Yonhap News, the latest figures seem to show that double that amount may have handed their ethereum over to alleged scammers.
And the police said they found a “national ring” of agents subordinated to a “Mr. A” (name withheld by South Korean courts for legal reasons).
EtherWallet bosses had “held large-scale lectures in university auditoriums” across the country until police shut down the network earlier this year.
But now police believe they have enough evidence to swoop in, arresting eight suspected masterminds and an anonymous double-digit number of local agents on charges of fraud and embezzlement.
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To know more:
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