Key Takeaways:
- A fake Flare Network staking site stole 3.4 million XRP from 71 investors
- Seoul police arrested three suspects and froze 17.3 billion won in assets
- The ring used fake Wikipedia entries and paid actors to appear legitimate
Back
Seoul police arrest 3 in $8.5M fake XRP staking scam
Seoul police arrested three people for operating a fake Flare Network staking site that drained 3.4 million XRP, worth $8.5 million, from 71 investors in an eight-day scheme last October.
"The suspects built a fake evidence base, planting false information on portal blogs, online news articles and Wikipedia, and producing YouTube videos featuring a paid stand-in," the Seoul Metropolitan Police Agency's Cyber Investigation Unit said in a statement Thursday.
The site, Fxrpntwork.com, impersonated Flare Network and its FXRP token, promising monthly returns of 1.5 percent to 1.8 percent with principal guaranteed. The scheme ran from Oct. 16 to Oct. 23, timed to coincide with FXRP's actual launch the month before. Investors were directed to move XRP off domestic exchanges through overseas venues into wallets the group controlled.
Police traced 27.3 billion won ($18.8 million) through wallets linked to the group, well above the 12.3 billion won confirmed stolen, pointing to additional victims beyond the 71 identified. A fourth suspect, also 29, remains overseas under an Interpol Red Notice.
Two men, both 29, have been referred to prosecutors on aggravated fraud charges. A third suspect, a 34-year-old paid stand-in who appeared in promotional videos, was charged with fraud. Average losses reached 173 million won ($119,000) per victim across the week the site was live, police said.
Investigators froze 17.3 billion won of assets across overseas exchanges within three days of receiving a tip from an exchange. Another 10 billion won moved during the investigation and remains unaccounted for. Police executed 54 search and seizure warrants and arrested one suspect at a hideout after he returned from abroad.
The suspects laundered funds by converting XRP into Bitcoin and Tether through overseas exchanges and dispersing the proceeds across multiple wallets, investigators found. The ringleader, identified only as A, was tracked through domain purchase records, internet access logs and communications among the suspects.
The case adds to a string of crypto fraud actions by South Korean authorities this year. In June, police charged 23 people over laundering $11.1 million in USDT for a Cambodia-based phishing ring. Investigators said they would treat crypto fraud with "zero tolerance" and urged investors to verify projects through official sources before sending funds.
This article is for informational purposes only and does not constitute investment advice.
