Ponzi scheme heads fined $23 million in South Korea cryptocurrency scam

Ponzi Scheme Heads Fined

Two unnamed business heads in South Korea have been fined a total of $23 million for running a Ponzi scheme involving a fake cryptocurrency.

Sohn Hyeon-gyu, of Yonhap News, reported that "A" (51) and "B" (62) were accused of making over 20 billion won in investment funds from unsuspecting investors.

On April 19, Judge Hwang Jin-jin, of Incheon District Court 14 in Korea, fined "A", $15 million and "B", $8 million for charges of violating a sales law.

The scam involved a cryptocurrency that mimicked bitcoin. Ponzi schemes work by requiring a constant stream of new investors into the business to pay for those already in the scheme. 

"A", who has served as head of the scheme, is headquartered in the Philippines and Interpol has a search ongoing for "B", the missing chairman of the scam.

Judge Hwang said, "The pyramid scheme carries a risk of disturbing the socio-economic order and creating many victims."

The large amount of investment in the scheme and the number of victims involved were taken into account as part of the ruling.

In November 2017, South Korea busted a $38 million Ponzi scheme that was targeted at elderly people. They have taken a tougher stance on cryptocurrencies in recent months, banning anonymous purchases and investigating exchanges.