Crypto Exchange Raided on MLM Fraud Charges, USD 214M In Assets Frozen

By Tim Alper5 days ago

V Global, a South Korean crypto exchange has been raided by police, with the firms CEO placed in custody, homes, and offices searched, and assets frozen with the trading platform accused of masterminding a large-scale, illegal multi-level marketing operation.

Police succeeded in obtaining court and prosecution service orders that have allowed them to search 22 properties connected with the firm, including its head office in the Gangnam District of Seoul, reported Hanguk Kyungjae, quoting police sources. Officers claim that the firms CEO, a 31-year-old man surnamed Lee, had been selling cryptocurrency using multi-level marketing methods.

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Previous reports from outlets such as Yonhap, as well as SBS and Segye Ilbo had given more details of the case, but had not mentioned the name of exchange (instead referring to it as an unnamed famous exchange) likely following requests from the police. However, social media users appeared to be aware that V Global was the exchange in question, and the Hanguk Kyungjae report has now confirmed this to be the case.

The court orders also allowed officers to freeze assets worth around USD 214m reportedly out of concern that Lee and senior executives may have otherwise sought to flee with the funds.

Police said that the exchange was using MLM methods while essentially posing as a bona fide exchange like Upbit. For instance, police said that high-stakes investors were promised they could expect to receive dividends three times higher than their original stakes in just six months with extra bonuses available for partners who recruited new members to the site.

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