South Korean police arrest scammers behind $19 million crypto Ponzi scheme

13 Apr, 2019
by David Robb
South Korean police arrest scammers behind $19 million crypto Ponzi scheme

The people responsible for an Bitcoin-based online Ponzi scheme that made around $19 million have been arrested. South Korean police made use of artificial intelligence to apprehend the suspects, as reported by Korea Joongang Daily.

The scheme was primarily aimed at older people and those with limited understanding of cryptocurrency. The CEOs set up a members-only shopping website as well as a cryptocurrency exchange. Members were encouraged to recruit others into the scheme, and were rewarded with M-Coin, a fake crypto created by the scammers. The scam was being run out of around 200 different offices in Seoul and elsewhere.

Read more: 5 reasons it's not too late to get into crypto

Artificial intelligence was key to tracking down the culprits, who had hidden accounting data in a corporate server and eventually moved their operations to a  private house once the investigation started.

According to Hong Nam-ki, the section chief of the Seoul Special Judicial Police Bureau for Public Safety's second investigation team, "Through keywords such as Ponzi, loan and recruiting members, we were able to teach the AI patterns of Ponzi schemes. The program can also identify advertisement patterns and identified the enterprise in question, which (was caught) with evidence provided by an unnamed informant".

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Read more about: South Korea

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