Police Bust Ponzi Ring Accused of Using Fake Volunteer Group to Sell Worthless Coin, Stealing $29.6 Million

11 branches set up nationwide to deceive 436 victims

Fake overseas exchange listing staged; seven suspects sent to prosecutors in custody

Police in South Korea have arrested a group accused of using a fake volunteer organization to gain victims’ trust and lure them into investing in a worthless cryptocurrency, stealing about $29.6 million in the process.

The Gyeonggi Nambu Provincial Police Agency said on July 15 that it had sent seven suspects to prosecutors in custody. They include the alleged ringleader, a Chinese man in his 50s identified only as A, on charges including organizing a criminal group, fraud and violating the law regulating quasi-receipt of funds.

The suspects are accused of telling victims between December 2024 and March 2026 that investing in a self-created virtual token called AIXT Coin would guarantee their principal and deliver high returns. They allegedly took a total of 40.9 billion won, or about $29.6 million, from 436 people.

Before soliciting investments, the group set up a volunteer organization called Brilliance Team.

Using stolen photos from social media, the suspects built personal relationships with victims. They also took part in volunteer activities at senior welfare facilities and wildfire recovery sites to build trust, then pitched the investment by promising returns of more than 1,000% and saying a listing on a major overseas exchange was scheduled.

Police said AIXT Coin was a fabricated token with no marketability. It was designed to trade only on an app created by the group.

The suspects expanded the operation using a classic Ponzi structure. They paid returns to existing investors with money from new investors, then encouraged those who saw early gains to bring in acquaintances.

The group also operated 11 branches across the country and held investment briefings featuring purported coin experts, targeting older people and wealthy individuals. As the date of the supposed overseas exchange listing approached, they shut all of the branches at the same time and disappeared.

Police said they obtained intelligence in March and opened an investigation. After imposing travel bans on the suspects, investigators carried out search and seizure operations at 15 locations nationwide and arrested the group.

Authorities also analyzed more than 5,700 bank accounts opened under borrowed names and urgently froze 560 million won, or about $405,000, in virtual assets identified as criminal proceeds.

Police found that even after the investigation began, the suspects approached some victims again and attempted a second scam by saying they would help recover their losses.

"Coin investments that promise guaranteed principal or high returns should be treated as suspected fraud," a police official said. People should be especially cautious if they are urged to invest through open chat rooms or told to install private trading apps.

Suwon — Jeong Jin-wook, Hankyung.com reporter

Jeong Jin-wook, Hankyung.com reporter crocus@hankyung.com