Key facts
- A fake staking site, Fxrpntwork.com, defrauded 71 investors of 3.4 million XRP, worth $8.5 million.
- The site impersonated Flare Network and its FXRP token, promising high monthly returns.
- Investors were directed to move XRP to wallets controlled by the alleged perpetrators.
- Two 29-year-old men have been referred to prosecutors on aggravated fraud charges.
- Police froze 17.3 billion won ($11.9 million) in assets linked to the scheme.
- A fourth suspect is overseas and subject to an Interpol Red Notice.
Seoul police have identified a fake staking website that operated for eight days last October, defrauding 71 investors of 3.4 million XRP, valued at $8.5 million. The site, Fxrpntwork.com, impersonated the legitimate Flare Network and its FXRP token, promising monthly returns of 1.5% to 1.8% with principal guaranteed.
Investigators found that the group behind the scam planted false information on blogs, online articles, and Wikipedia, and produced YouTube videos featuring a paid actor to create a false sense of legitimacy. Investors were allegedly directed to move XRP off domestic exchanges, through overseas venues, and into wallets controlled by the group.
Two 29-year-old men have been referred to prosecutors on aggravated fraud charges. The stand-in actor has also been charged with fraud. Police estimate the average loss per victim was 173 million won ($119,000).
Authorities traced 27.3 billion won ($18.8 million) through wallets linked to the group and managed to freeze 17.3 billion won ($11.9 million) of assets across overseas exchanges. Another 10 billion won moved during the investigation and is unaccounted for.
An overseas exchange alerted police last October to a surge in staking fraud. Investigators executed 54 search and seizure warrants, arresting suspects sequentially. A fourth man is overseas and subject to an Interpol Red Notice. South Korean police have stated they will treat crypto fraud with "zero tolerance" and urged investors to verify information from official sources before transferring funds.