South Korean prosecutors are determined to bring justice in a $651 million crypto scam that defrauded 8,000 individuals. The scam, operated through a platform named OnNetworks, promised investors “payouts” if they paid their utilities bills using cryptoassets. Unfortunately, the scammers failed to deliver on these promises, leaving victims unable to recover their investments.

Prosecutors in the trial, held at a branch of the Seoul Southern District Court, are pushing for severe punishments for the alleged masterminds behind the scam. The CEO of OnNetworks, referred to as Mr. Park, could face up to 15 years behind bars, while an executive from the same company named Mr. Kim may be sentenced to five years. Additionally, the CEO of an OnNetworks affiliated company, identified as Mr. Yeom, could face up to 12 years in prison.

The Operations and Deception

According to court proceedings, the accused launched OnNetworks as early as 2021 and actively recruited members until February of the following year. Potential victims were enticed by promises of cashback-like returns ranging from 4% to 9% on their platform payments. However, these returns turned out to be empty promises, leaving investors in significant financial losses.

Several alleged victims of the scam attended a hearing, pleading with the court to hold the defendants accountable for their actions. They voiced their demand for justice and urged the court to impose harsh penalties on Mr. Park, Mr. Kim, and Mr. Yeom. Victims hope that by pursuing legal action, they can recover their losses and prevent others from falling victim to similar scams in the future.

During the trial, Mr. Park expressed remorse and asked for forgiveness from the victims. He requested that the court grant him two months to rectify the damages caused. On the other hand, Mr. Yeom denied direct involvement in the alleged scam but acknowledged his moral responsibility as a company executive. He claimed that the events unfolded beyond his scope of responsibility.

In the wake of this massive crypto scam, the Seoul Southern District Prosecutors’ Office recently established a specialized crypto crime investigation unit. Consisting of 30 investigators from various agencies, including the prosecution service, the Financial Supervisory Service, the National Tax Service, and the customs bureau, this dedicated unit aims to combat fraudulent activities within the cryptocurrency industry more effectively.

The OnNetworks crypto scam highlights the importance of stringent legal action against fraudulent actors within the cryptocurrency space. Prosecutors are determined to secure significant prison sentences for those responsible, aiming to deter future scams and provide justice for the victims who lost a substantial amount of money. As regulatory authorities continue to strengthen their efforts in preventing crypto crimes, it is crucial for investors to exercise caution and conduct thorough research to avoid falling victim to similar schemes.

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