Seoul police have arrested three suspects behind a fake XRP staking platform that defrauded 71 investors of roughly 3.4 million XRP, worth approximately 12.3 billion won ($19 million), by promising guaranteed monthly returns on virtual asset deposits.
The Seoul Metropolitan Police Agency’s cyber investigation unit said Thursday it arrested the suspects on charges of fraud under the Specific Economic Crimes Aggravated Punishment Act, the Criminal Act, and the Similar Reception Act, with two of the three taken into custody. Police believe the full scale of the fraud could reach 27.3 billion won and are investigating the possibility of additional victims.
A Fake Site Built Around a Real Network
According to police, the suspects launched a fraudulent investment site called “FXRP Network” in October last year, falsely claiming that staking XRP through a newly released “FXRP” token would generate monthly returns of 1.5% to 1.8%. The scheme borrowed credibility from Flare Network, a blockchain project that genuinely exists, and FXRP, an actual XRP-linked asset issued by that network.
Investigators said the suspects timed their scam to coincide with FXRP’s official launch, creating a convincing but entirely fake staking service. The promised returns were higher than those offered by legitimate staking products. The site disappeared less than a month after it launched.
Promotion Across Multiple Platforms
Police said the group used Naver Blog, Naver Knowledge iN, Tistory, online articles, Wikipedia, and YouTube to promote the scheme. A Wikipedia entry falsely claimed that FXRP staking could only be done through the overseas exchange Binance, while YouTube channels using names resembling “Upbit Developer” and “Ripple (XRP)” featured actors reciting scripted remittance instructions to victims.
Overseas Exchanges Used to Bypass the Travel Rule
Victims were instructed to move their XRP from domestic exchanges to designated wallets via overseas exchanges, a method police say was designed to circumvent South Korea’s Travel Rule, which requires verification of sender and recipient information for virtual asset transfers exceeding 1 million won. Once received, the stolen assets were sold to over-the-counter traders and converted into Korean won.
Police launched their investigation after receiving intelligence from overseas exchanges flagging a wave of new “FXRP Staking” fraud cases in a short period. Using blockchain tracking techniques, investigators traced the movement of the stolen funds and froze approximately 17.3 billion won in virtual assets across multiple overseas exchanges within three days of receiving the intelligence.
Authorities have issued an Interpol Red Notice and arrest warrant for the alleged ringleader, who remains abroad, and are continuing to investigate accomplices involved in building and promoting the fraudulent site. The three identified suspects are reportedly friends.
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