South Korean Crypto Firm Expands to Abu Dhabi, Here’s Why

Previously, the CEO of South Korean tech company Wacon was arrested for allegedly masterminding a large-scale crypto scam that defrauded more than 500 investors. CEO Byun Young-oh, along with an accomplice identified as Yeom, orchestrated the Ponzi-style scheme through a platform called MainEthernet.

As reported by Coinmarketcap, Thursday (8/15/2024), Wakon, reportedly has around 12,000 members, allegedly operating as a Ponzi scheme or multilevel marketing campaign. The company offers virtual currency staking products, including tipping and mainnet businesses, without registering with financial authorities. The company has branches throughout South Korea.

The scam, which allegedly raised $366 million (assuming an exchange rate of $15,948 per US dollar), primarily targeted senior citizens. Many of them were promised interest rates of between 45% and 50% on their Ethereum deposits.

Fraud details

The platform, which functions as a digital wallet service, lured investors with promises of safe and profitable returns. However, in mid-2023, reports emerged that investors were unable to withdraw their funds.

Despite these concerns, Byun assured investors the issues would be resolved within months. In November 2023, signs of the company’s bankruptcy began to appear when MainEthernet’s Seoul office removed the company’s sign.

The Seoul Central District Prosecutors’ Office has indicted Byun and Yeom for fraud, and the case is expected to go to trial soon.

Prosecutors are continuing to investigate the extent of the scheme, seeking to identify additional victims and potential accomplices. Byun has denied involvement in any Ponzi scheme, claiming to have no knowledge of the structure. The investigation is ongoing.