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The CEO of a technology company in South Korea has been taken into custody for allegedly orchestrating a fraud scheme involving Ethereum (ETH) that affected approximately 500 individuals.
According to iNews24, a man identified by the surname Byun, who is the CEO of a firm called Wacon, has been detained and is set to stand trial.
South Korean CEO Allegedly Defrauded Over 500 Investors, Say Prosecutors
Byun was apprehended along with another individual suspected of being an “accomplice,” identified by the surname Yeom. Earlier reports from South Korean media, including Cheonji Ilbo, have referred to the CEO as Byun Young-oh.
The Fifth Criminal Division of the Seoul Central District Prosecutors’ Office announced that it would prosecute Byun and Yeom “on charges of fraud.”
Prosecutors indicated that a significant portion of the “victims” were senior citizens and asserted that Byun masterminded a Ponzi-like pyramid scheme.
Wacon provided a wallet service called MainEthernet, where it asserted that investors’ funds were securely stored.
However, in the summer of 2023, reports began to emerge online suggesting that investors were unable to withdraw their funds from the service.
In November 2023, journalists observed that a sign had been taken down from the front of the MainEthernet headquarters, which is situated in the affluent Gangnam District of Seoul.
Byun met with investors in November of the previous year, during which he claimed he would reimburse them and stated that he could “resolve everything in just four months.”
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Nevertheless, prosecution officials suspect that Byun was at the helm of “a multi-level marketing fraud” operation “valued at hundreds of billions of won.”
Authorities report that Byun and Yeom “lured investors” by “promising interest payments” in exchange for “depositing” cryptocurrency into the company’s wallets.
Prosecution representatives mentioned that they are “currently investigating” to determine if there are any “additional victims or accomplices” involved.
At one point, Cheonji Shinmun also reported that Byun allegedly assured investors they could anticipate returns of “45% to 50%” on their investments.
Byun reportedly denied the allegations of running a Ponzi scheme late last year, asserting:
“I don’t even know what a Ponzi is. […] And I don’t know how multi-level marketing schemes are structured.”
Majority of Investors Aged 60 or Older – Media Reports
Byun allegedly claimed that he also managed a cryptocurrency exchange and an NFT-based gaming venture.
Previous reports suggested that around 12,000 individuals may have invested in Wacon, with the majority of investors being aged 60 or older.
In May, scammers targeted ETH investors in South Korea, warning that their tokens would be “burned” if they did not take action.
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