Market Wanted: $ 214 Million in Frozen Assets

Source: iStock / vanbeets

South Korean police searched offices V Global, the exchange is accused of involvement in illegal and large-scale multilevel marketing (MLM) operations: the company’s CEO was taken into custody, the offices were searched, the assets were frozen.

According to Hanguk Gyeongjae, citing police sources, the police were able to obtain court orders and prosecution orders that allowed them to search 22 properties associated with the company, including its headquarters in the Gangnam-Gu district of Seoul. Agents say the company’s CEO, a 31-year-old man named Li, “sold cryptocurrency using multi-level marketing techniques.”

Media such as Yonhap, SBS and Segye Ilbo leaked additional information about the case without mentioning the name of the exchange – probably at the request of the police. However, social media users seem to have guessed that this is V Global, which is now confirmed by Hanguk Gyeongjae’s article.

The court orders also allowed officers to freeze about $ 214 million in assets, apparently out of fear that Lee and the firm’s senior management would flee with the funds.

Police said the platform used MLM techniques, presenting itself as a reputable exchange, “for example UpbitHigh-stakes investors, for example, were promised dividends three times their original share in just six months — with additional bonuses for “partners” who recruited new members to the site.

At the time of writing, the company’s website was offline, but a notification on the mobile site said “an error has been found in the transaction systems and is being investigated.” The exchange said it will strive to resolve the issue within four hours and will work to ensure that trading resumes “as soon as possible.”

V Global stated that it operates a token distribution service: every time a new crypto asset appears on the listing, it pays its customers with V Cash tokens. The exchange also claimed to have lower transaction fees than other competing platforms. It looks like the police have been investigating the stock exchange since the beginning of the year. In accordance with South Korean law, all MLM projects must be registered with an official body and comply with the provisions of the relevant law.

Police warned earlier this year that they intend to carry out “crackdowns” on cryptocurrency-related MLM projects, many of which are known to operate in the country. Some of them are reported to have been the subject of offline “briefings” in violation of coronavirus-related social distancing rules.

In addition, the country’s tax authorities have continued to raid suspects of tax evasion. In Geoje, South Gyeongsang Province, at least 36 cryptocurrency holdings have been confiscated, according to a Kuki News article.

Tax authorities across the country identified people who, they said, sought to hide their income (and avoid high tax bills) by making sneaky purchases of cryptocurrency: these cryptoassets were, in some cases, confiscated and liquidated by force. Several investigations are underway in other parts of the country.


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