Cryptocurrency Pyramid Scheme By Mining Max Busted In South Koreabr>
South Korean authorities have indicted 21 executives and top investors of US-based mining platform Mining Max for for allegedly scamming 18,000 investors out of 270 billion won (USD $250 million). The suspects were indicted by the Incheon District Prosecutors Office on charges of fraud and for violating the country’s law on door-to-door sales.
Three other people associated with the company, including Korean singer Park Jung-Woon, were charged with embezzlement, but were not detained. Another seven have escaped arrest, including company chairman Daniel Park, the vice chairman, and some top investors.
According to its website, Mining Max is headquartered in California and describes itself as a cryptocurrency mining company that allows individuals to invest in mining rigs. Despite being based in the United States, the company has all its mining farms in South Korea.
The prosecutors said Mining Max operated a pyramid scheme, awarding original investors with funds brought in by new recruits. The company allegedly promised higher returns to people who invested more money. About 14,000 investors are from South Korea. A total of 2,600 are from the US, 600 are from China, and the rest are from Japan and other countries.
Mining Max received 270 billion won from investors who believed they were purchasing mining rigs to earn a steady profit in cryptocurrency. Prosecutors believe only about 75 million won was actually used to mine ethereum, with the rest of it being used by the management for personal enrichment or to reward the top investors with Mercedes-Benz cars, Rolexes, and gold necklaces based on their performance. About $110 million is thought to have been stashed away in off-shore accounts by Mining Max executives.