Chosun Ilbo, South Korea’s largest newspaper, is facing serious allegations for reportedly promoting the fraudulent KOK cryptocurrency scheme, which resulted in financial losses totaling $2.97 billion, as detailed by Aju Press on Tuesday.
A coalition of victims asserts that Chosun Ilbo, along with its subsidiaries—IT Chosun and Digital Chosun Ilbo—deceived the public by portraying the KOK token as a legitimate investment.
Chosun Ilbo’s Alleged Role in the KOK Crypto Scam
According to the victims, these media outlets provided extensive, favorable coverage of the KOK token, thus lending credibility to what turned out to be a scam. Coverage highlighted the launch of KOK’s main transaction server and featured consumer satisfaction awards, which gave the scheme a false sense of legitimacy.
Jin Eun-ja, the leader of the victim coalition, emphasized that Chosun Ilbo’s promotion of the token likely prolonged the life of the scam, leading to substantial financial losses for unsuspecting investors.
Attorney Lee Min-suk, representing the victims, also raised concerns about the timing of Chosun Ilbo’s coverage, suggesting that the newspaper’s support may have shielded key figures behind the scam from facing early legal consequences.
Legal and Regulatory Response
The ongoing investigation is being conducted by the Ulsan District Prosecutor’s Office, although no significant results have emerged thus far. Jin Eun-ja also revealed that a key figure involved in the KOK scam remains a fugitive in the U.S., despite being arrested earlier this year and awaiting extradition to South Korea.
South Korean lawmakers are now calling for more robust action. During an October 7 National Assembly audit, Democratic Party representatives Yang Moon-suk and Min Hyung-bae demanded a full-scale investigation into the KOK scheme. They pointed out that the KOK token operated as a multi-level marketing scam, drawing in 1.86 million investors and resulting in damages estimated at 4 trillion won (approximately $2.97 billion).
The Downfall of the KOK Token
The KOK token once peaked at $6.83 in February 2022 but has since plummeted to $0.0003129. Despite this steep decline, the token continues to be traded on four crypto exchanges: ByBit, Gate.io, Indodax, and HTX. Recently, ByBit recorded a 24-hour trading volume of $73,114 for the token.
The operators behind the KOK project have largely abandoned it, with the last recorded social media activity occurring in June 2023, leaving investors increasingly worried about the fate of their investments.
Broader Regulatory Context
In the wake of the KOK scam, South Korean regulators have ramped up their scrutiny of other cryptocurrency schemes. A notable case involves Do Kwon, the founder of Terraform Labs, who is facing allegations of orchestrating a $40 billion cryptocurrency fraud connected to the collapse of TerraUSD.
Terraform Labs and Do Kwon recently reached a $4.47 billion settlement with the U.S. Securities and Exchange Commission (SEC), signaling a broader crackdown on fraudulent crypto activities.
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