Five OneCoin affiliates arrested in Korea, crackdown continues
Whereas we’re usually pretty on top of OneCoin affiliate arrests globally, this one from back in June slipped through the cracks.
Since the start of this year, Korea’s Financial Supervisory Service has
opened 27 investigations into cases of suspected infractions of the Act on the Regulation of Conducting Fund-Raising Business Without Permission this year.
One of those investigations was into OneCoin, which eventually lead to the arrest of five affiliates.
Specifics of the arrests are unclear. What we do know is that five OneCoin affiliates were arrested shortly after a police investigation began in late May.
The investigation was initiated at the behest of the Illegal Finance Monitoring Department, a division of Korea’s Financial Supervisory Service.
The five arrested affiliates stand accused of soliciting around ₩7 billion won ($6.17 million USD) of investment into OneCoin.
They were allegedly selling the cryptocurrency OneCoin with promises of a ten-fold return on buyers’ investment.
With OneCoin suspending withdrawals back in January, affiliates have been unable to withdraw ROI amounts represented in their backoffices.
I’m guessing there was local coverage of the arrests in Korean, however I’ve been unable to find any.
I know “OneCoin” in Chinese is completely different to OneCoin in English, and I’m guessing the same is true in Korean.
If any Korean readers can fill in the gaps, it’d be greatly appreciated.
Meanwhile in response to a “burgeoning” and mostly unregulated cryptocurrency industry emerging in Korea, the Financial Services Commission, Korea Fair Trade Commission and Ministry of Justice are reviewing existing law.
This follows an announcement last month announcing a crackdown on MLM cryptocurrency scams.
Authorities are analyzing existing Korean law, following the finding that current law leaves authorities ill-equipped to deal with cryptocurrency Ponzi schemes.
The government has been cracking down on illegal outfits like (OneCoin), but their efforts are inhibited by the fact that existing legislation (Act on the Regulation of Conducting Fund-Raising Business Without Permission) does not include the terms and relevant detail pertaining to modern financial instruments like cryptocurrencies.
The task force plans to remedy this lapse by amending the regulations to include “cryptocurrency exchange and simulated cryptocurrency exchange”.
Punishment will also become more severe, with the maximum prison term and fine levied increasing from the previous five years and 50 million won to 10 years and 500 million won.
The task force is also planning on including provisions to allow for the confiscation of profits generated from criminal activity.
Additional details regarding the task force’s proposed revisions include regulations to prevent identity theft, ensure greater transparency in market dealings, and (a) ban (on) multi-level marketing sales practices.
No word on the fate of the five arrested affiliates.
Changes to existing law proposed by the taskforce are expected to be passed by the Korean National Assembly by the end of the year.