In a shocking revelation, a North Korean defector has been arrested for allegedly defrauding 21 people out of $728,000 in a complex cryptocurrency scam. The news was first reported by Chain Retrieval and has since triggered concern about cross-border crypto crimes involving former intelligence-linked operatives.
According to officials, the accused posed as a crypto and blockchain expert, targeting investors through social media and exclusive investor groups. Promising massive returns through a “next-generation blockchain platform,” he claimed insider knowledge and early access to private token sales.
The scam ran for over a year, with victims mostly based in South Korea and Southeast Asia. The defector allegedly created fake whitepapers, demo apps, and even held virtual meetings to gain the trust of investors. He spoke fluent Korean and English and leveraged his background story to build credibility.
Victims transferred both fiat and cryptocurrency, hoping to gain early profits from what they believed were legitimate DeFi projects. However, once the funds were collected, the accused cut off contact, deleted accounts, and attempted to vanish.
Victims Duped Through Fake Tokens and Whitepapers
The investigation revealed that the defector had no real technical background and used open-source code and AI-generated documents to build the illusion of authenticity. The so-called projects had no backing, no blockchain activity, and no market presence.
Cybercrime units traced the scam through a series of digital wallets, eventually leading to the suspect’s arrest in Seoul. Authorities recovered laptops, hard drives, burner phones, and wallets connected to the stolen funds.
Police believe the accused may have received support or guidance from foreign entities, as the techniques used were “highly sophisticated,” mimicking real Web3 startup models.
What makes this case especially alarming is the use of identity manipulation, language skills, and geopolitical backgrounds to win trust and evade suspicion. With crypto regulation still developing in many parts of Asia, such frauds are harder to detect early.
Law enforcement is now working with blockchain analysis firms to track down the stolen funds and identify possible accomplices. So far, none of the 21 victims have recovered their money.
Authorities are urging the public to be extremely cautious with crypto investments that promise unrealistic returns, especially from individuals or startups that cannot provide transparent verification.
This incident adds to the growing list of crypto-related frauds tied to global operatives exploiting the anonymity and complexity of blockchain technology.