[Ulsan = E-Daily Reporter Choi Hoon Gil ] Police have announced plans to conduct a proactive investigation into the KOK Coin (KOK Token) multi-level marketing scam, which caused losses totaling 2.5 trillion won to 570,000 victims both domestically and internationally. The ruling party urged a swift and proactive investigation into large-scale cryptocurrency crimes, emphasizing the need to track down hidden assets, repatriate fugitives on the red notice list, and provide compensation to victims.

On the afternoon of the 21st, during a National Assembly audit by the Administrative and Security Committee held at the Ulsan Metropolitan Police Agency in Jung-gu, Ulsan, Ulsan Police Commissioner Choi Bo-hyun responded to Democratic Party of Korea Representative Yang Bu-nam’s call for a swift and proactive investigation into the KOK Coin case by stating, “We are continuing the investigation,” and added, “We will continue to investigate beyond the 404.4 billion won in damages (for which a pre-indictment order for confiscation and forfeiture has been granted).” When Rep. Yang reiterated, “You must actively investigate this case, which involves the blood and tears of countless victims,” Commissioner Choi replied, “We will do so.”

The KOK Coin case is a multi-level virtual asset fraud scheme that, according to prosecution estimates, caused losses totaling 2.5759 trillion won to 570,707 victims both domestically and internationally. The scale of the losses is the largest among domestic digital asset crime cases since the Terra-Luna crisis. Considering that the Terra-Luna case was adjudicated in a U.S. court, the KOK Coin case is the largest-scale digital asset crime case ever adjudicated in a Korean court.

The ring began issuing KOK Coin in 2019, attracting investors with deposit rewards and a multi-level marketing scheme, but when the “ponzi scheme” became unsustainable, they shut down the service and embezzled the investment funds. Key organizers, including the chief financial officer, have been on the run abroad for several years and are subject to Interpol Red Notices. The first-instance criminal trial for some members of the ring is currently underway at the Ulsan District Court.

According to on-chain analysis by Core Security and related reports by Edaily, large-scale money laundering involving KOK Coin took place through domestic and international virtual asset exchanges. The ringleaders siphoned off funds while skillfully evading the authorities’ investigation, taking advantage of the fact that victims were unable to withdraw their investment funds. (Reference: E-Daily, September 11, “[Exclusive] 120 billion won siphoned off while victims’ funds were frozen… First-ever tracking of KOK Coin”),

As related reports continued to surface, billions of won worth of KOK coins moved from wallets suspected of being linked to the ring last month—the first such activity in four years and nine months. (See October 2 edition, <[Exclusive] KOK Coin Funds Move for First Time in Over Four Years… “Money Laundering Warning Signs”>)

In this regard, according to the “Status of the Investigation into the KOK Case” document submitted to Representative Yang Bu-nam by the Ulsan Metropolitan Police Agency, the police obtained a total of 404.4 billion won in pre-indictment confiscation and forfeiture preservation orders from the Ulsan District Court targeting the suspects’ criminal proceeds from August 2023 through April of last year.

However, the actual assets subject to disposition prohibition measures totaled 69.8 billion won, amounting to only 17.3% of the amount for which the court granted preservation orders. This marks the first time the scale of criminal proceeds and disposition prohibition measures in the KOK Coin case has been officially confirmed. (See the October 18 article, “[Exclusive] Whereabouts of 2 Trillion Won in KOK Losses Unclear… Police’s Recovery of Frozen 69.8 Billion Won Also ‘One Hurdle After Another’”)

In response, Rep. Yang displayed Core Security’s on-chain fund analysis and E-Daily reports on a screen during the National Assembly audit on the 21st. He stated, “Assets subject to a disposition prohibition order account for only 17.3 percent, which is far too low,” adding, “We must actively track down the suspects’ assets and preserve them through confiscation and forfeiture.”

Rep. Yang pointed out, “Although the police have seized the cold wallets that the suspects used to hide their criminal proceeds, they have been unable to decrypt them due to the suspects’ flight and the concealment of passwords,” adding, “We must conduct a proactive investigation to block the movement of these assets.”

Rep. Yang continued, “One of the five KOK red-notice fugitives has been apprehended (in the U.S.) and is currently on trial in immigration court, with extradition proceedings also underway. The remaining four red-notice fugitives have fled to Turkey and Canada,” adding, “We must conduct a proactive investigation.”

Rep. Yang pointed out, “Victims are giving up without even being interviewed,” adding, “The police need to raise awareness to encourage victims to actively provide statements regarding their losses.” Following Rep. Yang, Rep. Lee Sang-sik of the Democratic Party also suggested during the parliamentary audit that day, “The investigation into the KOK Coin case is dragging on,” and stated, “This needs to be improved.”

In response, Commissioner Choi Bo-hyun, when asked again by Rep. Yang whether he would conduct a proactive investigation, replied, “I have seen the related E-Daily articles,” and reiterated, “I will proceed with a proactive investigation.”