Korean news giant Chosun Ilbo accused of supporting $3 billion KOK crypto scam

Victims of the KOK crypto scam have called out South Korea’s largest daily newspaper for promoting the fraudulent scheme, which led to at least $2.97 billion in losses.

According to an Ajlu press report, a coalition of victims has accused Chosun IIbo subsidiaries IT Chosun and Digital Chosun Ilbo of deliberately promoting the fraudulent KOK token scheme to the public.

The coalition alleges that these media outlets provided extensive coverage that lent legitimacy to the token, including reporting on the launch of KOK’s main transaction server and awarding the company a grand prize for consumer satisfaction.

Jin Eun-ja, the coalition leader, claims scheme operators reportedly used these endorsements to mislead investors into trusting the project when concerns about it emerged, ultimately contributing to their financial losses.

Meanwhile, Attorney Lee Min-suk, representing the coalition, pointed out the suspicious timing of Chosun Ilbo’s coverage and awards, suggesting that it played a key role in giving the scheme an air of credibility, ultimately drawing more unsuspecting investors into the scam. 

He called for a special investigation to determine whether Chosun Ilbo’s actions helped key figures in the scam avoid legal trouble early on, particularly in light of the Ulsan District Prosecutor’s Office investigation, which has yet to produce meaningful results.

Eun-ja also expressed frustration that one of the key promoters of KOK, identified only as Mr. Han, remains free in the United States despite being a red-notice fugitive. As of the last update, Han was arrested in the US earlier this year and is awaiting extradition to South Korea.

Regulators step in

Democratic Party lawmakers Yang Moon-suk and Min Hyung-bae raised the issue during an Oct. 7 National Assembly audit in Seoul, calling for a more thorough investigation into the entire KOK debacle.

The lawmakers allege the scheme operated as a multi-level marketing scheme that promised that it managed to rake in 1.86 million domestic and international investors and led to approximately four trillion won ($29.7 billion) in damages.

At its peak, the KOK token reached as high as $6.83 in February 2022, but its value has since plummeted dramatically to $0.0003129 at the time of writing per CoinGecko data. Yet, the token remains live on four centralized exchanges: ByBit, Gate.io, Indodax, and HTX, with its highest 24-hour trading volume of $73,114 recorded on ByBit.

However, the operators seemed to have abandoned the project’s X account, with the last post made in June 2023.

In other news, South Korean regulators are also awaiting the extradition of Do Kwon, the controversial founder of Terraform Labs. Kwon faces charges in South Korea and the United States related to an alleged $40 billion cryptocurrency fraud involving TerraUSD.