Seoul police say a fake staking website that operated for eight days in October last year stole 3.4 million XRP from 71 investors, with confirmed losses totaling 12.3 billion won, or about $8.5 million. Local outlet Chosun reported Thursday that two men, both 29, have been referred to prosecutors on aggravated fraud charges.
Site allegedly posed as Flare Network and FXRP
According to police, the website, Fxrpntwork.com, impersonated the legitimate Flare Network project and its FXRP token. The operators allegedly promised monthly returns of 1.5% to 1.8% and told investors their principal would be guaranteed.
Police said victims were instructed to move XRP off domestic exchanges in South Korea, route the funds through overseas exchanges, and then send them to wallets controlled by the group. The site shut down on October 23, and the operators disappeared.
False online trail built to support the scheme
Investigators said the group planted false information on portal blogs, online news articles, and Wikipedia. They also produced YouTube videos featuring a paid stand-in, so anyone researching the project would find what looked like confirmation from multiple independent sources. Police said the fraud followed the actual launch of FXRP the month before.
The stand-in, 34, has been charged with fraud. Police put the average loss at 173 million won, or about $119,000, for each victim during the week the site was live.
Police froze 17.3 billion won on overseas exchanges
Police said they froze 17.3 billion won in assets across overseas exchanges as soon as they detected the scheme. Another 10 billion won moved during the investigation and remains unaccounted for, according to investigators.
That brings the total amount traced through wallets linked to the group to 27.3 billion won, or about $18.8 million. Police said that figure is well above the 12.3 billion won in confirmed losses tied to the 71 known victims, which suggests the number of victims may be higher.
Tip came from an overseas exchange
Police said an overseas exchange alerted investigators in October last year to a surge in staking-related fraud. Investigators then executed 54 search and seizure warrants, arrested one suspect at a hideout after he returned from abroad, and detained the others in sequence.
A fourth man, also 29, remains overseas and is the subject of an Interpol Red Notice. None of the four men has been tried, and police have not released their identities.
Police say crypto fraud will face “zero tolerance”
South Korean police have brought a series of crypto cases this year. The report cited a June case in which 23 people were charged over laundering $11.1 million in USDT for a Cambodia-based phishing ring.
Investigators said they would treat crypto fraud with “zero tolerance” and urged investors to verify official sources before sending funds.
