Travel Agents

Travel agent caught up in $3bn cryptocurrency scam

A travel agent based in South Korea has become an unwitting victim of a $3 billion Ponzi scheme.

Seo Jin-ho had invested US$86,000 ($128,090) in cryptocurrency and bitcoin trading platform PlusToken before authorities discovered the multi-billion-dollar business was a scam.

Based in South Korea, Seo, 40, had been introduced to the platform by a colleague, who vouched after visiting the travel agent “several times in 2019” he could earn 10 per cent a month on investments.

“You won’t regret this,” she said, according to Seo, as reported by The Wall Street Journal.

The travel agent’s scepticism finally gave way, and he purchased an initial US$860 ($1,280) investment on PlusToken. His assets reportedly grew considerably, triggering him to invest more on the platform.

In less than five months, Seo had invested US$86,000 ($128,090) in cryptocurrencies, and only cashed out US$500 ($744).

“I was thinking, what’s the point of keeping money in the bank?” Seo told WSJ. He went to PlusToken conferences, told his friends about it, and became a convert to the platform.

However, in June 2019, Chinese authorities concluded PlusToken was a Ponzi scheme and arrested six Chinese citizens allegedly running the platform out of Vanuatu. The site then stopped working.

People couldn’t get their money out, and Seo and many others lost access to “everything”, WSJ reported.

PlusToken – which New York-based cryptocurrency data analysis firm Chainalysis, which helps track illicit transactions, said was a Ponzi scheme – drew investors mainly in South Korea and China in 2018 and the first half of 2019, netting at least $US2 billion ($2.98 billion), the firm told WSJ.

According to Chainanalysis, Ponzi schemes and other frauds involving bitcoin and cryptocurrencies lured at least US$4.3 billion ($6.4 billion) from investors in 2019. This was bigger than the reported combined US$3 billion ($4.47 billion) haul of 2017 and 2018.

Christopher Janczewski, a special agent at the Internal Revenue Service, and a prior lead on criminal investigations that involved cryptocurrencies, said plenty of inexperienced investors are being taken in by stories of bitcoin riches.

Fraudsters use that naivety against them, he told WSJ. 

“A lot of it is just traditional crime dressed up,” he said. “They’re still always driven by fear, or confusion, of missing the next boom.”

Featured image: Fintech concept (iStock.com/metamorworks)


To stay ahead of any potential scams, follow the Australian Federal Government’s offical Scamwatch page on Twitter, or visit http://scamwatch.gov.au

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