South Korea sentences crypto operators in USDT scam

South Korean authorities imprisoned two fraudsters for laundering $1 million in USDT from a voice phishing operation.

The leader was sentenced to five years in prison, while his employee was sentenced to two years and eight months.

leader, 41-year-old chief executive ran an illegal crypto exchange with his. A voice phishing group were supported by Tether’s USDT, which they used to laund $1 million.

Funds vanished within an hour

South Korean prosecutors stated the criminals used Telegram to contact the exchange chief for three months.

The criminals pretended to be police officers or relatives, attempting to trick victims into sending money to accounts run by the illegal exchange. Once the victims deposited money to these accounts, local banks received that money for the exchange.

The employees then deposited the fiat currency for USDT. Those funds quickly moved from cheques, to cash deposits in the sketchy currency and then onto Tether coins.

A prosecution attorney has said regulators and banks did not freeze victims’ accounts. The victims reported the scams to police but there was no time for re-covering the money.

Other prosecutors told the court that the operation for voice phishing was abroad, but did not say exactly where it happened. He said to the court ‘It was so fast that the money went away in less than an hour, it disappeared.

Yeongnam Ilbo said the court ruled that defendants did not try to repair the victims’ serious harm, according to Presiding Judge Lee Young-cheol.

The judge described the crimes as heinous and said the defendants made it nearly impossible to recover the lost money.

A head of state and his employee are charged under the Special Act on the Prevention of Damage and Refund of DAMAGE from Telecommunications Financial Fraud.

South Korean officials said they could not determine the number of victims who lost money to the voice phishing fraud.

South Korean officials warn of rising stablecoin fraud

In South Korea, the adoption of cryptocurrencies is growing rapidly but criminals are increasingly using them to scam people, too. Last year, suspicious crypto transactions were 54% higher than last year compared to the previous year according to regulators.

The ministers in South Korea have called for a swift government action to stop criminals from exploiting stablecoins such as USDT and USDC. In September, lawmaker Jin Sung-joon said that “stuffcoins are increasingly being misused in foreign exchange crimes such as illegal currency exchange”.

Lawmaker said ‘We need a coordinated, proactive approach that includes police officers like KoFIU and the Korea Customs Service in tracking, identifying and prosecuting criminal funds.

He added, “More policy measures should be outlined to prevent illegal, unauthorized remittances and tackle financial crimes involving crypto assets.”

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