Korean Authorities investigate Shipwreck crypto scam

On July 31, 2018, local Korean news channel Korea JoongAng Daily reported that the South Korean authorities are currently investing a crypto investment scam involving Shinil Group as the main figure. They had allegedly promised to pay investors in gold from a sunken Russian shipwreck.

The Lost Shipwreck

The Seoul-based Shinil Group had announced in early July 2018 that it had found the Russian armoured cruiser Dmitrii Donskoithat that sank 113 years ago. And also claimed that the said ship had $131 billion worth of gold in it. CEO of Shinil Group Choi Yongseok admitted that there is no exact evidence proving the existence of such value of gold regardless of which around 100,000 investors invested around $53.7 million since the initial launch of the company in 2018. They promised the investors that they will be reimbursed with the gold from the ship if they purchase the company’s own cryptocurrency.

Action against company

Following this event, Seoul’s Gangseo District Police has issued a travel ban on the company’s CEO Choi and is planning to question them and other related people. This scam reportedly involved the head of a Singapore-based affiliate of Shinil Group, Yu Ji-Beom, according to Korea JoongAng Daily. It is known that the crypto exchanges Donskoi International Exchange was established by Yu, as well as the posts about the shipwreck, were spread by him. Currently, Yu is in Vietnam to avoid the investigation as told by his acquaintances. The shares of Jeil Industries, a South Korean manufacturer rose on July 17 when Shinil Group’s former head become the second largest shareholder in Jeil. The authorities are investigating whether attempts to profit from Jeil industries were made by the suspects.

 

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