Summary
- Seoul police revealed that a fraudulent staking site operated for eight days last October, stealing 3.4 million XRP from 71 investors, amounting to 12.3 billion won ($8.5 million).
- The scammers masqueraded as Flare Network and FXRP, disseminating misleading information through blogs, articles, and YouTube.
- Authorities tracked 27.3 billion won ($18.8 million) across wallets associated with the group and managed to freeze 17.3 billion won of those assets.
A fraudulent staking website that was active for just eight days last October managed to siphon off 3.4 million XRP from a total of 71 investors, equivalent to 12.3 billion won ($8.5 million), according to the Seoul police. Local news outlet Chosun reported that two 29-year-old men have been referred to prosecutors on charges of aggravated fraud.
Authorities stated that the website, named Fxrpntwork.com, impersonated Flare Network and its legitimate FXRP token, enticing investors with promises of guaranteed monthly returns between 1.5% and 1.8%. Victims were misled into transferring their XRP from domestic exchanges to wallets controlled by the fraudsters, after which the site abruptly shut down on October 23, and the operators vanished.
Fabricated Evidence
Police disclosed that the scammers created a facade of legitimacy by planting false information on blogs, news articles, and even Wikipedia, in addition to producing YouTube videos featuring an actor to mislead potential investors into believing there was independent verification for the project. This scheme coincided with the genuine launch of FXRP the previous month.
A 34-year-old actor involved in the scam has been charged with fraud. According to police estimates, victims lost an average of 173 million won ($119,000) each during the week the site was operational.
Upon discovering the scheme, law enforcement froze 17.3 billion won in assets on overseas exchanges. An additional 10 billion won was transferred during the investigation and remains unaccounted for. This leads to a total of 27.3 billion won ($18.8 million) traced through wallets linked to the fraudsters, significantly surpassing the 12.3 billion won confirmed as lost by the 71 victims, suggesting there may be more victims.
Last October, an overseas exchange alerted police to a spike in staking fraud activities. Investigators executed 54 search and seizure warrants, apprehending one suspect at a hideout following his return from abroad, while the others were captured in succession. A fourth suspect, also 29, is currently overseas and subject to an Interpol Red Notice. The identities of all four suspects have not been disclosed, and they have yet to face trial.
This year, South Korean police have tackled a series of cryptocurrency-related cases, including charging 23 individuals in June for laundering $11.1 million in USDT linked to a Cambodian phishing operation. Authorities have pledged a "zero tolerance" approach to crypto fraud and advised investors to verify information through official channels before transferring funds.