South Korean Police Arrest 19 in ‘Reading Room’ Crypto Fraud Bust

South Korean authorities have made a significant breakthrough in a crypto fraud case, arresting 19 individuals involved in a “reading room” scam. The group ran an open chat room, possibly through a crypto Telegram group or KakaoTalk open chat, where they pretended to offer legitimate cryptocurrency trading tips. However, they ended up defrauding 308 investors out of approximately $18.8 million. The police believe that some members of the gang posed as crypto experts in chat groups, while others pretended to be ordinary investors. They lured victims into the scam by claiming to have made substantial profits by following tips from the “reading room.” The arrests were made by the Daegu Police Agency’s criminal task force, but they suspect that at least six other suspects are still at large and are currently overseas. Interpol has been asked to issue red notices for these individuals. The gang would invite potential victims to an open chat room, populated with gang members claiming to have made significant profits. They persuaded victims to download apps connected to crypto exchanges, where they could supposedly buy and sell unlisted coins. After gaining trust and small profits, the gang convinced victims to invest more. However, when victims tried to withdraw their funds, the gang demanded withdrawal fees, and if the victim refused to comply, they would cut off contact. The police are now attempting to locate the stolen funds. The gang leader used “pig-butchering” tactics to recruit new members, promising employment in Myanmar before confiscating passports and forcing them to participate in the scam. Kwak Joon-ho, a lawyer, warned that fraudulent schemes utilizing open chat rooms, including reading rooms, are on the rise and perpetrators may face both fraud and organized crime charges. This recent arrest follows another case in Gwangju, where 28 people were apprehended for defrauding 50 South Korean investors of $1.3 million.