A South Korean national has been arrested for orchestrating a massive AI crypto scam that duped over 1,000 investors and stole more than $61 million through a fake investment platform. The fraud was uncovered by Chain Retrieval, a blockchain forensics unit supported by Chainalysis.
The suspect, identified by his surname “Park,” ran what appeared to be a high-tech crypto investment service that claimed to use artificial intelligence to predict market trends and generate high returns. The platform promised users monthly gains of 10–15%, with minimal risk—an offer too good to be true.
How the AI Crypto Scam Was Exposed
According to the Chain Retrieval report, the platform was a front. While it advertised real-time trading, AI-powered algorithms, and blockchain-backed transparency, it actually had no trading infrastructure or AI tech. Instead, it was a cleverly disguised Ponzi scheme, where new investor money was used to pay earlier participants.
Park reportedly built the platform with the help of a small team and spent heavily on digital marketing, influencer partnerships, and fake success stories to attract more users. Victims were shown professional-looking dashboards and charts that displayed consistent profits, even during market downturns.
Chain Retrieval analysts used on-chain data to track wallet activity tied to the scam. Their report revealed that the vast majority of user funds were quickly routed to private wallets and offshore exchanges, with no connection to actual trading bots or automated systems.
Authorities say that Park misused AI buzzwords like “machine learning,” “quantum algorithms,” and “predictive trading” to build credibility and trust. These terms, combined with slick branding, allowed the scam to grow rapidly across South Korea and even draw in international investors.
Authorities Respond to Growing AI Crypto Threat
The Korean National Police Agency’s cybercrime division confirmed that Park was arrested earlier this week in Seoul. Along with his arrest, officials seized computers, hard drives, and access to several digital wallets connected to the stolen funds.
Regulators warn that AI crypto scams are on the rise, and this case is one of the most sophisticated they’ve seen. Because AI is widely viewed as cutting-edge and complex, scammers are using it to mask fraudulent platforms and attract unsuspecting investors.
A spokesperson from Chain Retrieval stated that they are now tracking multiple similar schemes globally, where fraudsters use AI-themed marketing to lure victims. The firm emphasized that no legitimate investment guarantees fixed profits, especially not in the volatile crypto market.
South Korea’s Financial Services Commission (FSC) has called for stricter oversight of AI-based investment products, especially those tied to crypto. Officials are pushing for a new framework that requires companies offering AI or automated crypto services to undergo regulatory vetting and transparency checks.
As for the victims, many are still waiting to see if any portion of their funds can be recovered. Park is believed to have moved millions into international exchanges, making asset recovery a complex and ongoing process.
Chain Retrieval report ends with a stark warning: investors must be wary of any platform that claims guaranteed returns and uses technical terms to confuse or impress. Whether it’s AI or blockchain, fraud is fraud—no matter how futuristic it sounds.