Police in South Korea are continuing their investigation into the crypto exchange V Global, with some reports claiming that up to 40,000 investors may potentially have been left out of pocket – most of whom have been described as “elderly citizens and housewives.”
Police swooped on 22 locations this week, including the V Global head office in Seoul and the home of the exchange’s CEO, a 31-year-old man surnamed Lee, claiming they had evidence the exchange was using illegal multi-level marketing (MLM) methods. The exchange had allegedly been promising investors returns of x3 their stakes within three months – as well as bonuses of over USD 1,000 for recruiting new members. Officers received a court order allowing them to freeze USD 214m worth of assets.
Maeil Kyungjae reported that investors had complained they had not received any of the money they had been pledged – and were even unable in many cases to withdraw their original stakes.
The case appears to have been brewing for some time – police filed their request to freeze the exchange’s assets in the middle of last month following complaints from a group of tens of disgruntled investors.
According to Edaily and Yonhap, the majority of the investors were older people with no crypto investment experience, often using their retirement funds as stake money.
Meanwhile, per a report from Hanguk Kyungjae, Lee was also the subject of a criminal investigation for using MLM methods while working at another domestic crypto exchange as recently as summer last year. The exchange in question has since closed, per the report, but officers claim Lee may have sought to continue his alleged MLM operations with V Global.
After yesterday claiming that it was offline after “an error” had been found in its “transaction systems,” the exchange has since claimed that it is back online with “issues resolved” in a notice on its website. V Global has not responded to a Our request for comment.
Some investors have spoken out, with a number of customers speaking to the TV network MBC. One claimed that the perpetrators of the alleged fraud deserved “life imprisonment,” as under the current legal system would allow the masterminds to “get out of jail in four or five years and then do it all over again” as part of a “vicious circle.”
The media network claimed that last month Lee had said he was “not guilty of committing any illegal activities.”
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