South Korean police have detained three individuals accused of orchestrating a $12.3 million cryptocurrency scam involving a fraudulent XRP staking platform. Authorities swiftly froze 17.3 billion won in virtual assets shortly after receiving a tip and are now investigating potential additional victims, with losses possibly doubling to 27.3 billion won.
How the Scam Operated
The scheme revolved around a fake website called Fxrpntwork.com, launched in October last year. It falsely promised investors steady monthly returns between 1.5% and 1.8% by staking XRP through a so-called FXRP network. Seventy-one people transferred approximately 3.4 million XRP, valued at around 12.3 billion won, before the site disappeared in under a month.
The scammers impersonated the Flare Network and FXRP legitimate blockchain entities to build credibility. They spread their pitch via popular South Korean online platforms including Naver Blog and YouTube, using fake personas like “Upbit Developer Yu○○” to lure investors. They directed victims to move funds through overseas exchanges such as Binance, cleverly evading South Korea's Travel Rule, which demands strict user verification for transfers exceeding one million won.
Ongoing Investigations and Wider Impact
Police transferred two suspects to prosecutors under detention, while one remains under investigation. There's also a hunt for an overseas suspect via an Interpol red notice. Recorded asset freezes point to the scam's sophisticated operation, including the conversion of stolen XRP into Korean won through over-the-counter traders.
The timing of the scam coincided with the real FXRP product launches, suggesting the criminals exploited market events for their credibility.
This information is for educational purposes and does not constitute financial advice.
