Thai authorities have dismantled a crypto fraud ring accused of stealing US$15 million from over 870 South Koreans, using romance scams, fraud, and chain-hopping tactics for laundering.
Key Takeaways
- Multiple types of scams were carried out by a group called Lungo Company, victimizing 878 people between July last year and July this year.
- The ring used techniques such as OTC broker networks (in tourist areas like Pattaya) for converting crypto to fiat, and chain-hopping (swapping funds across blockchains) to hide transaction trails.
- This resulted to an arrest of 25 members; the ringleader and eight core members are in custody in Thailand, awaiting extradition to South Korea.
Thai police, in coordination with South Korean authorities, announced Monday the arrest of 25 individuals linked to “Lungo Company,” a fraud ring that defrauded nearly 900 South Koreans of about US$15 million, according to Decrypt’s latest report.
Victims were lured via romance scams, fake data breach compensation or lottery offers, and false promises tied to valueless cryptocurrencies. The victims were manipulated into transferring money to fake platforms or purchasing crypto under false pretenses.
Laundering Tactics Revealed: Chain-Hopping and OTC Brokers
To launder the money, the group reportedly used over-the-counter (OTC) broker networks in Thailand, specifically in tourist hubs like Pattaya. These brokers, often unlicensed, convert crypto to fiat. The ring also used chain-hopping to obscure the money trail by rapidly moving funds across different blockchains, as mentioned in Decrypt’s report.
Authorities say this multi-layered approach is more advanced than many previous rings, which tended to rely on a single tactic. A police official pointed out the modular structure of the operation, where separate teams focused on different scam types, strict internal control, performance incentives, and internal discipline.
Officials and Experts Weigh In
Meanwhile, cybercrime consultant David Sehyeon Baek emphasized that OTC networks in tourist areas and cross-chain transfers make the tracking of money laundering complicated, giving the culprits a temporary advantage.
Crypto Market Holds Steady Despite Scam News
As of today (12:00PM UTC), the broader crypto market has a muted reaction amid scam news. Bitcoin (BTC) is currently trading at approximately $113,052, exhibiting a sideways movement with a modest 0.1% gain over the past 24 hours.
Despite the high-profile Thai scam bust, there is no immediate evidence of a major market reaction specifically tied to this news. Prices appear to be more influenced by macroeconomic indicators and global sentiment, although incidents of crypto fraud continue to fuel broader concerns about regulatory oversight and investor confidence in the crypto ecosystem.
Outlook: Regulatory Pressure and Investor Vigilance
Thailand’s authorities now face extradition proceedings for several suspects. The case may accelerate regulatory scrutiny of OTC brokers and crypto-to-fiat conversations. For investors, this incident highlights the essence of due diligence and awareness when engaging with crypto platforms or offers, particularly unsolicited invitations that promise returns, particularly too-good-to-be-true offerings.
Summary
Thai police arrested 25 people tied to “Lungo Company,” a fraud ring accused of defrauding 878 South Koreans of $15M via romance scams and fake crypto offers. The group laundered funds through OTC brokers and chain-hopping across blockchains. Despite the bust, the crypto market remained stable, with Bitcoin hovering around $113K. Experts warn this case may spur tighter regulations on OTC networks and crypto-fiat conversions.
