The cybercrimes division of Seoul, South Korea’s capital city, has arrested two individuals suspected of being involved in the large crypto phishing scam. According to local sources, the suspects include a software engineer and his employer.
The engineer has been identified as an experienced 42-year-old computer programmer who authorities allege was hired to create a fake XRP trading website. South Korean news outlets also reported that the crypto phishing scam’s “mastermind” pretended to be an employee working for the real XRP exchange website.
Over 60 Investors Targeted
The fraudster allegedly emailed users from a fake account and told them their funds had been “frozen.” In the email, there was a link to the fraudulent crypto trading website which prompted unsuspecting users to enter their username and passwords.
As detailed by local sources, 37 Japanese, and 24 South Korean traders fell for the scam as they proceeded to enter their login details on the fake website. Users’ login information was then used to access and steal funds from their crypto accounts on the real digital currency trading website.
While the phishing scam has only targeted South Korean and Japanese citizens, the FBI may have gotten involved in the investigation because the Ripple company, which issued the XRP tokens, is registered in the United States.
According to Korean news outlet JoonAng Ilbo, authorities were able to track down the scammer as he quickly converted the stolen XRP to South Korean won (KRW). He then reportedly used the money to book a room at a five-star apartment building and buy various luxury items.
Fraudster Was Also Scammed
Authorities also revealed the fraudster had previously been a victim of phishing scam in which he lost a large investment due to a hack in 2014. When investigators failed to recover his stolen funds, he became “inspired” to orchestrate phishing scams himself.
Notably, crypto-related scams have now been widely reported and have resulted in billions of dollars worth of losses. Several market analysts have also attributed the drop in cryptocurrency prices due to the increasing number of fraudulent activities associated with them.
As covered on CryptoGlobe, SFG Alternatives chief investment officer, Larry Shover, noted the “intense, intense scrutiny” over the numerous scams related to digital currencies has kept many people, particularly institutional investors, from investing in them.