Over 5,700 Victims in South Korean Falls for Cryptocurrency Scam Quantvine

Recently, Ponzi schemes using cryptocurrencies have become rampant. These scams advertise cryptocurrency investments through the Internet and social media platforms, and utilize advanced technologies such as artificial intelligence and so-called jargon to target people who know little about cryptocurrencies in their fraudulent activities.

On March 19, Korea's Financial Supervisory Service (FSS) said it had requested the Korean police to launch an investigation into cryptocurrency Ponzi scheme Quantvine. As of 3 p.m. on March 18, Quantvine's victim group had grown to 5,700 from 4,000 last week, and petitions calling for an investigation into Quantvine have been posted on the National Assembly's e-petition website.

The FSS said there are many fraudulent businesses like Quantvine. The FSS is keeping an eye on the situation, and if there are more losses, the consumer alert level could be raised from the current “caution” to “warning”.

To attract more victims, this scam paid little returns to the victims at the initial stage of the investment. There was an additional bonus for inviting new investors to participate. As a result, the rewarded investors introduce the scam to their friends and family, leading to a surge in the number of victims.

Many investors who participated in scams like Quantvine reported that they could not get their investment back. These fraudulent companies claimed to be tech companies with official websites in South Korea and headquartered overseas. Under the guise of artificial intelligence or other technology, they guaranteed that returns could be generated with a small amount of principal, and claimed to be partners with well-known cryptocurrency exchanges such as Binance or Coinbase.

Such scams have also affected the credibility of cryptocurrencies. Cryptocurrencies are high-risk investment tools, and so-called guaranteed returns and principal protection are almost impossible. Compliant cryptocurrency exchanges emphasize the investment risks involved, while investment schemes that offer additional incentives for inviting new investors are often typical Ponzi scams.