Seoul police say a fake Flare Network staking website defrauded 71 investors of a total of 3.4 million XRP tokens, worth approximately 12.3 billion won (about $8.5 million) at the time, after briefly going live last October. Local media, citing police sources, reported that two 29-year-old suspects have been transferred to prosecutors on aggravated fraud charges.
The website only ran for 8 days
Police stated that the website impersonated Flare Network and its legitimate token FXRP, claiming to offer monthly returns of 1.5% to 1.8% and promising principal protection. Victims were instructed to first transfer XRP from domestic South Korean exchanges, and then through overseas platforms into wallets controlled by the suspects.
The website shut down on October 23 after operating for eight days, and the operators subsequently disappeared. Police estimated that each victim lost an average of approximately 173 million won, or about US$119,000, during the website's existence.
Gang falsifies public information
Police stated that the suspect also posted false content on portal blogs, online news sites, wiki pages, and other channels, and created YouTube videos to create the illusion that the project had been externally verified. The person appearing in the videos was a hired double, 34 years old, who has been charged with fraud.
Police believe this practice makes it easier for investors searching for project information to mistakenly believe that the information comes from independent sources. The website in question also went live shortly after the actual launch of FXRP.
17.3 billion won in assets have been frozen.
Police stated that after receiving a report from an overseas exchange in October of last year regarding a surge in margin trading fraud, they immediately launched an investigation and froze 17.3 billion won in assets at the overseas exchange. Approximately 10 billion won was also transferred during the investigation and its whereabouts are currently unknown.
Investigators say they traced 27.3 billion won (approximately US$18.8 million) through wallets linked to the group, exceeding the currently confirmed losses of 12.3 billion won. This suggests the actual number of victims may be greater than the 71 confirmed cases.
Police executed 54 search and seizure warrants during the investigation and arrested one suspect after he returned from overseas, subsequently making arrests of other individuals involved. Another suspect, also 29 years old, is currently overseas and has been issued a red notice by Interpol.
Additional information:South Korean police have handled several crypto-related cases this year. Just in June, they indicted 23 people, accusing them of laundering $11.1 million in USDT for a Cambodian-linked spies.
