South Korean authorities have launched a large-scale raid on domestic cryptocurrency exchanges that are allegedly involved in multi-level marketing (MLM) fraud by millionaires. The police charged the V Global platform with an illegal operation, which reportedly stole hundreds of millions of dollars from investors.
The planner may have deceived more than 40,000 people
According to Yonhap News Agency, the police obtained a court order to search 22 properties related to the cryptocurrency company, including its headquarters in the Gangnam Financial District of Seoul.
Although local media initially refused to reveal the identity of the cryptocurrency exchange that the police raided, social media users began to bet that V Global might be involved in the legend. In fact, Han Qing confirmed the news on Wednesday.
Investigators involved in the case believe that the CEO of the media identified as “Li” by the media may allegedly “sell cryptocurrency using a multi-level marketing method.”
In other words, as of press time, a Seoul court ordered the freezing of the company’s assets worth US$214 million.
As is common in MLM fraud schemes, the relevant authorities stated that the move was formed as the parent company of a well-known domestic crypto exchange (such as Upbit), provided that it is necessary to ensure that those who invest in counterfeit trading platforms receive high returns.
SBS reported that since August 2020, the CEO and his associates have been defrauded of more than 40,000 members.
MLM projects are strictly regulated in South Korea
Currently, the desktop version of the V Global website displays a technical error message stating that it may take “approximately 4 hours” to resolve the inconvenience. However, the message has been online for more than a day. However, its mobile website stated that errors in the trading system have been “discovered and are under investigation.”
South Korea has strict policies to regulate the country’s multi-level marketing programs, and they pay special attention to fake MLM programs related to fake cryptocurrencies.
According to the law, companies that use such technologies to promote products must comply with the “Door-to-Door Sales Act” and should be registered with the Fair Trade Commission.
What are your thoughts on South Korea’s latest crackdown on MLM fraud related to cryptocurrencies? Let us know in the comments section below.
Picture Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for reference only. It is not a direct offer or solicitation of an offer, nor is it a recommendation or endorsement of any product, service or company. Bitcoin.com does not provide investment, tax, legal or accounting advice. The company or the author shall not bear any direct or indirect responsibility for any damage or loss caused or allegedly caused by the use or reliance on any content, goods or services mentioned in this article or related thereto.