Five OneCoin affiliates were arrested in South Korea in June for allegedly soliciting approximately $6.17 million USD in investments. The arrests followed an investigation launched in late May by the Illegal Finance Monitoring Department, a unit within Korea's Financial Supervisory Service. This action was part of a larger sweep that saw the agency open 27 probes into suspected violations of the Act on the Regulation of Conducting Fund-Raising Business Without Permission this year.
The five individuals are accused of promoting OneCoin, a cryptocurrency now known for its inability to process withdrawals, by promising investors a tenfold return on their capital. Details surrounding the specific circumstances of their apprehension remain limited. Local Korean media reports on the arrests have not been readily found, making independent verification challenging.
This crackdown aligns with a broader regulatory review by Korean authorities in response to a rapidly growing, largely unregulated cryptocurrency market. The Financial Services Commission, Korea Fair Trade Commission, and Ministry of Justice are analyzing existing laws. These agencies found current legislation inadequate for prosecuting cryptocurrency-related Ponzi schemes.
A government task force is working to address these legislative gaps. Proposed amendments aim to explicitly include "cryptocurrency exchange and simulated cryptocurrency exchange" within existing regulations. The revisions also seek to significantly increase penalties for financial crimes. The maximum prison sentence could rise from five years to ten years, and fines could increase from 50 million won to 500 million won. Provisions allowing for the confiscation of illegally obtained profits are also under consideration.
Further proposed changes include measures to prevent identity theft and enhance market transparency. The task force is also contemplating a ban on multi-level marketing sales practices, a common distribution method for schemes like OneCoin. The current status of the five arrested affiliates is not publicly known.