Chosun Ilbo, South Korea’s largest newspaper, is facing backlash for allegedly promoting the KOK cryptocurrency scheme, a fraudulent operation that led to $2.97 billion in losses. Victims of the KOK crypto scam have accused Chosun Ilbo and its subsidiaries of misleading the public by presenting the KOK token as a legitimate investment opportunity. The media outlets allegedly provided extensive coverage and endorsements, leading unsuspecting investors to lose massive financial sums. Attorney Lee Min-suk, representing the victims, suggested that the newspaper’s support may have helped the key figures behind the scam avoid legal consequences in its early stages, delaying accountability.
As the fallout from the KOK scam unfolds, both victims and lawmakers are pushing for greater accountability. The Ulsan District Prosecutor’s Office is conducting ongoing investigations, although significant results have not emerged. A key figure behind the KOK scam is at large in the U.S. and is awaiting extradition to South Korea to face charges related to the fraudulent scheme. The KOK scandal has prompted South Korean lawmakers to call for a comprehensive investigation into the multi-level marketing scheme, which drew in approximately 1.86 million investors and caused damages estimated at 4 trillion won.
Despite the collapse of the KOK token from a peak value of $6.83 to $0.0003129, it is still being traded on four crypto exchanges, including ByBit, Gate.io, Indodax, and HTX, with ByBit alone recording a 24-hour trading volume of $73,114 recently. The operators of the KOK project appear to have largely abandoned it, with no social media activity since June 2023. This lack of communication has heightened investor concerns about the fate of their investments. In a broader regulatory context, South Korean regulators are closely monitoring the case of Do Kwon, the controversial founder of Terraform Labs, who is facing separate allegations related to a $40 billion cryptocurrency fraud involving the collapse of TerraUSD.
The case involving Terraform Labs and Do Kwon has intensified regulatory scrutiny in both South Korea and the United States. In June, Terraform Labs and Do Kwon agreed to a $4.47 billion settlement with the U.S. Securities and Exchange Commission (SEC), initiating the process of winding down its operations. The KOK scandal and the broader regulatory context of cryptocurrency fraud highlight the importance of due diligence and caution when investing in the crypto space. It also underscores the need for increased oversight and accountability to protect investors from fraudulent schemes and scams prevalent in the industry. In light of these developments, it is crucial for stakeholders, regulators, and investors to work together to create a safer and more transparent crypto ecosystem.
