Two South Korean lawmakers, Yang Moon-suk and Min Hyung-bae, have called for a comprehensive investigation into the KOK token crash during a National Assembly audit held in Seoul. The alleged cryptocurrency fraud has resulted in estimated losses of 4 trillion won ($3 billion), affecting approximately 1.86 million investors globally, with many victims being middle-aged workers and retirees.
How the Scheme Operated: Ponzi-Like MLM with High Monthly Returns
According to local media, the KOK token was promoted through a multi-level marketing (MLM) scheme that promised investors monthly returns of 4% to 20%. The token’s price once reached $7 on international exchanges but later collapsed to near zero, leaving investors with massive losses. The project lured victims with the promise of passive income, mirroring classic Ponzi structures.
Victims Accuse Chosun Ilbo of Complicity
A coalition representing the victims has accused Chosun Ilbo, South Korea’s largest newspaper, of actively promoting the fraudulent token despite allegedly being aware of its nature. Attorneys representing the victims pointed to the “suspicious timing” of the newspaper’s coverage and awards showered on the project. Lead victim Jin Eun-ja disclosed that a top KOK recruiter, currently on bail in the U.S. as a fugitive, used investor funds for gambling. Victims demand a formal apology from Chosun Ilbo and the removal of all KOK-related content.
Regulatory Implications and Next Steps
The scandal has reignited debates about crypto regulation in South Korea. Lawmakers are pushing for a thorough probe into the token’s issuers, promoters, and fund flows, as well as the role played by established media. If the investigation leads to criminal charges or new legislation, it could set a precedent for holding media outlets accountable for promoting unverified crypto projects. As of now, Chosun Ilbo has not issued a public response.
The case continues to unfold, with global attention focused on how South Korea’s legal system handles the intersection of cryptocurrency fraud and media responsibility.