Two South Korean men have been arrested for orchestrating a phishing scam against Ripple (XRP) investors with fake emails claiming to be from Ripple and directing users to enter their account details on the scammers’ phishing site. The mastermind of the scam was tracked down by police after he made a large withdrawal into fiat, booked a suite at a five star apartment building and went on a luxury shopping spree.
Luck Runs Out
As reported by Korean joins.com this Friday a joint investigation by the Korean National Police Agency and the FBI Cyber division recently concluded with the arrest of two South Korean men suspected of perpetrating multiple phishing scams against Ripple investors.
The two individuals convicted are a software engineer who created a near duplicate of an XRP trading site, as well as the man who hired him.
The two sent fraudulent emails telling users of the real exchange that their funds had been frozen and directing them to the fake exchange. Once users entered their account details, the scammers were able to log in to the users’ account on the real exchange and withdraw users’ funds, totalling some $800,000 in XRP. 61 investors fell for the scams in total.
The first phishing attack took place in July 2017, with several more attempts in the months that followed, although only two of the attempts bore any fruit. It is unclear as of now at what point the FBI got involved in the investigation – the 61 victims were all South Korean or Japanese citizens.
Ripple itself is based in California, however, and it is possible that the American agency got involved for that reason.
In order to try to obscure their identities, the scammers moved funds between multiple exchanges and traded back and forth between different cryptocurrencies.
Ultimately, however, they had to withdraw to fiat, and as in South Korea fiat exchanges have mandatory KYC requirements, the mastermind finally had to reveal his identity.
He made large withdrawals into Korean Won. Police investigators then found that he had spent a lot of money on a luxury suite in a five star apartment building, as well as on conspicuous consumption and extravagant shopping sprees.
Scammee Turned Scammer
The background to the story is a little more sombre, unfortunately.
In 2014 he was the victim of a different phishing scam and lost a lot of money to criminals.
When police investigators could not catch the perpetrators or return his stolen money, he grew bitter, and eventually decided that if the law couldn’t help when he was the victim, they might not be able to do anything when he was the perpetrator either.