A joint operation carried out by Seoul police cybercrime division has led to the arrest of members of a phishing scam group which stole over $800,000 worth of XRP from dozens of victims in South Korea and Japan.
So far, two people have been arrested in relation to the crime, a computer programmer and his employer. According to a local reports, the programmer, a 42-year-old office worker was employed to design an exchange site like that of Ripple to lure unsuspecting users. Having done that, the mastermind reached out to users via email, telling them their funds have been frozen.
Unknown to users, the email contained link to the fake website, where the investors from Korea and Japan where convinced to login details to their real account. This granted the mastermind access to their accounts on the real exchange, leading to the loss of their funds. Although the phishing scam targeted Korean and Japanese citizens, the FBI was notified in December due to the fact that Ripple is an American based company.
According to local media outlet, the mastermind of the phishing scam transferred the stolen crypto assets to local fiat currency and proceeded to use the funds to pay for lavish lifestyle including paying for a five star accommodation and buying other luxury items.
Apparently the mastermind of the phishing scam was himself a victim of a hack in 2014 where he lost all his investment. Not getting justice, he was inspired to carry out a similar crime.
Besides hiring a programmer, he was said to have liaised with another accomplice, a crypto currency exchange operator who provided him with information including emails, affiliated exchanges and 2FA status of potential targets. While the Japanese accomplice is still wanted and believed to be in Japan, the cybercrime division is reaching out to Japanese authorities for collaboration
It is important to know that this is South Korea’s first cryptocurrency phishing case. More so, the scam has sparked up some intriguing legislative debates as the lead accomplice has stated that he has already spent the whole $800,000 worth of Ripple on accommodation and other items, hence, cannot be returned.
Again, because the Korean police cannot legally freeze his other assets due to the fact that cryptocurrencies are not yet a legal tender in the country, victims of this phishing scam may not be compensated or get justice.