Police in South Korea have said they fear the crypto exchange Global V could be at the center of a fraud ring that has sucked in some $ 2 billion, as investigations on the platform intensify and police raids the stock exchange offices.

Through Seoul Shinmun and Hankook Ilbo, police say some 52,000 customers may have been affected. They have been investigating the platform for several months, after a group of investors claimed they had not been able to withdraw funds from the exchange.

Assets worth around $ 214 million were frozen in May.

Police said they believed the platform – whose website is still operational and conspicuously resembles a standard South Korean crypto exchange – was, in fact, a front for a pyramid scam. The website has not been updated with any announcements since May, and the company has not responded to Cryptonews.com requests for comments.

Police have obtained arrest warrants for four people, three of whom are believed to be senior officials. A court that granted the arrest warrants agreed with police that there was a danger that individuals could otherwise flee with investor assets – perhaps sensing the kind of “exit scam” that seems to have spoiled South African investors in the Africrypt platform, because its brains, two brothers aged 21 and 20, are said to have fled abroad with some $ 3.6 billion in customer coins.

Meanwhile, in South Korea, more than 70 other people have been placed in custody as police continue to investigate V Global.

Police charged the four arrested with various fraud and illegal marketing offenses.

The exchange is said to be the brainchild of a 31-year-old man nicknamed Lee. Media in South Korea reported that Lee was investigated for using suspected and illegal multilevel marketing (MLM) methods in another, now defunct, exchange.

Police said Lee had lived “a life of luxury” and that V Global’s hierarchy consisted of eight levels, with 82% of “members” at the lowest level. Members were told they would receive bonuses for recruiting more people and were assured that their bets of around $ 5,300 would yield massive returns three times their original investment.

However, police added that many such bonuses appear to have been paid out of the company’s own token, which officers say has “no cash value.”

Lawyers representing a group of clients say up to 70,000 people may have been affected.
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