Rise of Crypto Scams in South Korean Chat App "Reading Rooms"

South Korean police warn of chat app crypto scams

In a recent warning issued by South Korean police, a new wave of crypto scammers has been targeting users on chat apps, particularly those frequenting trading- and investment-themed channels. On February 21, reports from News1 and Daejon Ilbo highlighted the Sejong South Police Station's announcement regarding their ongoing investigation into these deceptive practices. With South Korea's retail crypto market being both large and highly active, the emergence of such scams poses a significant risk to investors.

South Korea's crypto market and online "reading rooms" boom

South Korea's retail crypto market thrives on its vibrant online community, where investors gather in chat app channels often dubbed "reading rooms." These channels, found on platforms like Telegram and KakaoTalk, serve as hubs for discussion on a range of crypto-related topics, from Bitcoin and popular altcoins to lesser-known tokens and trading platforms. With some channels boasting up to 1,500 members, the mix of traders and enthusiasts creates a fertile ground for information exchange—and and, unfortunately, for scammers.

The Scamming Tactics Identified

Scammers in these "reading rooms" employ various tactics to lure victims, from making false promises of guaranteed monthly gains to offering so-called advanced trading tips. Encountering numerous crypto-themed chat rooms where scammers actively solicit personal engagement through direct messages. While some scam attempts are thwarted by vigilant channel moderators, others persist, misleading individuals with the allure of insider knowledge and substantial returns.

The number of reports received and the investigation by the Sejong South Police Station

The Sejong South Police Station has taken a keen interest in these cases, having received around 20 reports from deceived individuals. Victims were often enticed by exaggerated claims and promises of high returns, leading them to join paid VIP rooms and deposit funds into unlicensed crypto exchanges. The police's investigations have revealed a pattern of scammers reassuring their victims of impending profits, only to later abscond with the funds or outright refuse reimbursement. This issue is not isolated to chat apps alone; police also noted that many victims were drawn into these scams through misleading advertisements on YouTube.

Police warn against risk-free, high-return investment scams

In light of these findings, police officials have issued stern warnings against the allure of high-return investments that purportedly come without risk. They emphasize the importance of skepticism and due diligence, reminding investors that genuine financial opportunities guaranteeing the initial stake while promising high returns simply do not exist. The crackdown in Busan, where a $32 million chat app-based crypto scam ring was dismantled, serves as a stark reminder of the prevalence and danger of these scams.

The rise of crypto scams in South Korean chat app "reading rooms" underscores the critical need for vigilance among investors. As the landscape of digital currency continues to evolve, so too do the strategies of those looking to exploit unwary participants. By staying informed, skeptical, and proactive in reporting suspicious activities, individuals can protect their investments and contribute to a safer, more transparent crypto market.