“Crypto” fraudsters in South Korea are increasingly preying on citizens in their fifties and sixties, a new report has found, with crypto-flavored multi-level marketing (MLM) schemes now running wild.
Per EDaily, the regulatory Financial Supervisory Service (FSS) says there was a rise of 41.6% in the number of instances of suspected crypto-themed fraud cases reported in the country in the period January to October last year on the same period in 2019.
The media outlet quoted a number of anonymous individuals as stating they had handed over large chunks of their pensions and retirement savings to people they thought they could trust, making investments in some cases on the advice of friends they had had since “elementary school.”
One man explained that he had lost 90% of his funds after trusting an old school friend with an investment suggestion. Another woman in her 60s explained that she had lost USD 177,000 on an investment – cashing in bonds in order to raise the money.
South Korean IT journalist Janet Cho told Cryptonews.com,
“Inexperienced investors with cash to spare are low-hanging fruit for fraudsters right now. And tech-themed MLM scams sound a little more believable to older folks – who often have cash set aside depreciating in bank accounts – if they come recommended by a ‘friend.’ Even if that ‘friend’ is actually looking to reach ‘diamond status’ or whatnot on their pyramid.”
EDaily quoted a legal expert as stating that a particularly favorite target for MLM fraudsters pretending to represent bona fide crypto firms and “funds” were “middle-aged women struggling with the difficulty of making stock market investments.”
So-called crypto moms have been flocking to bitcoin (BTC) in recent months in South Korea – but it appears fraudsters are attempting to take advantage of this trend, with outlandish promises of three- to tenfold returns on investments.
The FSS explained that while recently introduced legislation required crypto players to abide by anti-money laundering protocols it “does not yet regulate” for “consumer protection or [MLM] fraud” instances, warning citizens to instead be on their guard against investment offers that seem too good to be true.
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