South Korean Paper Faces Scrutiny Over Alleged Promotion of $3B KOK Crypto Scam

Lawmakers in South Korea are demanding a special investigation into the KOK cryptocurrency scam, accusing the Chosun Ilbo newspaper of promoting the fraudulent scheme despite knowing its nature. The scam is estimated to have caused $2.97 billion in damages, with victims calling for expedited accountability.

During a heated National Assembly audit in Seoul, lawmakers called for an investigation into the KOK cryptocurrency scam, which has reportedly defrauded investors out of 4 trillion won ($2.97 billion). Victims of the scam have accused South Korea’s leading right-wing daily, Chosun Ilbo, of knowingly promoting KOK while the scam was in full operation.

According to Aju Press, the victims’ coalition believes two subsidiaries of Chosun Ilbo — IT Chosun and Digital Chosun — played an integral role in promoting KOK as a legitimate project. Jin Eun-ja, the leader of the coalition, stated that these endorsements were used by scammers to reassure investors and delay the prosecution of those behind KOK.

KOK Token Scam: A Multi-Level Marketing Ponzi Scheme

KOK tokens were used on the KOK PLAY platform to consume Korean movies and games, offering returns to investors in exchange for attracting new participants. The scheme promised 7-12% commissions for converting KOK tokens into Bitcoin and gave bonuses for recruiting new investors, making it a classic Ponzi and multi-level marketing (MLM) scam.

The KOK token attracted nearly 2 million investors from 2019 to 2023, with many lured in by promises of high returns and the endorsement of popular media outlets. Chosun Ilbo’s business news arm, IT Chosun, highlighted a major KOK milestone in April 2022, and in June 2022, Digital Chosun awarded KOK a grand prize for “consumer satisfaction.”

Ongoing Investigation and Victims’ Demands

South Korea’s investigation into the KOK crypto fraud is being led by the Ulsan District Prosecutor’s Office. However, the case has made little progress, and the country is still waiting for the extradition of a key suspect, “Mr. Han,” who was arrested in the U.S. earlier this year. Victims have accused Han of using their funds for gambling while out on bail.

Lawmakers Yang Moon-suk and Min Hyung-bae have echoed the victims’ demands for a more in-depth probe to expedite justice for those defrauded.

Chosun Ilbo’s Troubled Past

This is not the first time Chosun Ilbo has faced allegations of unethical journalism. The newspaper’s former editor, Song Hee-young, was previously accused of accepting bribes from a shipping firm for favorable coverage. He was sentenced to one year in prison before the Supreme Court overturned the decision, and his case is expected to be reopened.

The involvement of a media giant in the promotion of KOK has raised further concerns about the role of journalism in enabling fraudulent schemes and delaying justice for victims.

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