Two men from South Korea allegedly succeeded in creating a bitcoin pyramid scheme that managed to take around 20 billion Korean won ($20 million) from unsuspecting investors, according to local news source Yonhap.
On April 19, a judge presiding over Seoul’s Incheon District Court fined the two scammers with $15 million and $8 million respectively, according to local news source Yonhap.
The report said the two men started the scheme in 2015 and subsequently built a multi-level company by promising investors high returns through investing in bitcoin.
“The multi-level transaction is a risk to the socioeconomic order with mass production of many victims,” the judge was cited to have said in the report. He also went on to say that the fines were given based on the large amount of money they had taken from victims of the putative scheme.
It is curious that this report comes just days after next-door China made significant efforts to strengthen the rules concerning these type of business models and, and also started breaking down on multi-level marketing schemes that try to pass off as bitcoin investments.
A report made on Wednesday revealed that Chinese law authorities arrested the founders of a claimed nationwide cryptocurrency pyramid scheme, which sold the DBTC cryptocurrency at a price of 13 yuan ($0.48) per coin, guaranteeing a return of 80,000 yuan ($13,000) per day for an initial investment of 3 million yuan ($480,000). These scammers managed to garner more than $13 million from over 13,000 defrauded customers.