The CEO of Wacon, a South Korean technology firm, has been taken into custody for allegedly orchestrating a large-scale cryptocurrency scam that defrauded more than 500 investors.
Ponzi Scheme Through MainEthernet Platform
CEO Byun Young-oh, together with an accomplice named Yeom, allegedly devised a Ponzi-style scheme through a platform known as MainEthernet. Wacon, which reportedly boasts around 12,000 members, is suspected of functioning as a Ponzi scheme or a multi-level marketing campaign. The firm has been offering virtual currency staking products, including tipping and mainnet businesses, without proper registration with financial authorities. Its operations are spread across various branches throughout South Korea.
Targeting the Elderly with False Promises
The scam, which allegedly collected a staggering $366 million, primarily targeted elderly citizens, many of whom were promised interest rates between 45% and 50% on their Ethereum deposits.
Crypto Chaos: Wacon CEO Nabbed for $366M Rug Pull!
Big news from Seoul as the Wacon CEO, Byun Young-oh, faces charges for running an epic Ethereum-themed scam worth $366 million.
The fraud reportedly ensnared 500+ investors, mostly boomers, promising 45% gains in a classic… pic.twitter.com/JEaxgo2DPs
— Mario Nawfal’s Roundtable (@RoundtableSpace) August 12, 2024
Deceptive Practices and Company Collapse
The platform operated as a digital wallet service, enticing investors with assurances of secure and profitable returns. However, by mid-2023, reports surfaced indicating that investors were unable to withdraw their funds. Despite growing concerns, Byun reassured investors that the issues would be resolved within a few months. By November 2023, signs of the company’s collapse became evident when MainEthernet’s Seoul office removed its signage.
Legal Actions and Ongoing Investigation
The Seoul Central District Prosecutors’ Office has charged Byun and Yeom with fraud, and the case is anticipated to go to trial soon. Prosecutors are continuing to investigate the full extent of the scheme, seeking to identify additional victims and potential accomplices. Byun has denied any involvement in a Ponzi scheme, claiming ignorance of such structures. The investigation remains ongoing.
This report was supported by local media outlets Cheonji Daily and iNews24.
