South Korean Police Probe Crypto Mining Outfit on ‘Ponzi Scam’ Suspicion

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Source: Busra/Adobe

South Korean police officials are investigating a crypto mining firm that allegedly failed to pay back its investors – after promising them monthly returns of up to 12%.

according to the news agency yonhap and newspapers Chosun IlboThe police intervened after a legal complaint was filed by lawyers representing a group of investors. The allegations centered around a firm named “BTBank”. The English transliteration of the company’s Korean name (Bit뱅크) is “Bitbank” (not to be confused with the actual Japanese crypto exchange of that name). It also appears to go by the name OK-Bit.

of the firm Website Feature promotional information about Coke Play. This “multi-level membership” project uses a Ethereum (ETH)-based altcoin named coke play and is currently being investigated by South Korean police, has previously reported on KOK Play and the legal case building around the firm. Following the publication of our most recent report on KOK Play, a reader contacted to claim that he had “family members who were deeply involved in KOK Play”. The same person said they had “watched the company destroy relationships” with “deceptive tactics”.

Police said BTBank has been accused of failing to return the investment stake to its investors. The company reportedly told investors that they could profit from mining tokens using rigs located in South Korea and overseas.

Like other suspected mining scams, the firm allegedly promised investors “guaranteed 3-7% monthly mining profits.” “High-end” investors were told they could expect 12% returns on their bets.

Investors were asked to deposit in USD, and were asked to invest as much as $200,000 in the project. He was informed that the company operates six mining centers in South Korea besides a mining farm in Kazakhstan.

Another crypto mining Ponzi scheme?

The police claim that BTBank’s business model used a “multi-tier structure” that “offered bonuses when existing investors sign up new investors.” The company reportedly told potential investors that they could put as little as $250 into the project. But it reportedly said that the bets were fully refundable, and could be withdrawn from the BtBank platform at any time.

Every time they recruited a new investor, the company allegedly promised, an existing member’s “level” would increase. Prolific recruiters were told they could earn over 50% per month in bonus payments.

But lawyers allege that “since the middle of the year,” many investors have been unable to make withdrawals. “Investors tried to close their accounts and recover their investments,” Chosun explained. But the company reportedly “delayed payments” for “several months”.

Lawyers claimed that “over 200 victims” have been left without access to their funds.

One of the law firms involved in the class action lawsuit predicted that “more than 1,000 victims” could be left out of pocket.

BTBank said it has responded by forming “an investor association”. It also said it would “focus on recovering investments by reducing the size of its headquarters” and reducing its “fixed costs”.

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