‘Dead’ South Korean crypto fraudster resurfaces and pays back victims

A South Korean crypto fraudster who was declared dead has resurfaced — and repaid most of his victims.

Seoul prosecutors said they restored the legal identity of a man who had been treated as deceased under domestic law, enabling the sale of his frozen cryptocurrency assets and the repayment of about $60,000 to victims of his investment scam, local media outlet Yonhap reported on Wednesday.

After committing a major crypto fraud, the man fled to Cambodia in June 2019, the publication reported. At the request of family members, a Korean court issued a formal declaration of disappearance. Under South Korean law, that ruling effectively rendered him dead at home.

For years, he remained abroad. But in January, Cambodian authorities deported him to South Korea. Prosecutors arrested him immediately upon arrival and began untangling a bureaucratic knot that had turned a living suspect into a legal ghost, Yonhap reported.

To facilitate victim compensation, prosecutors sought and obtained a court order cancelling the earlier disappearance ruling. On February 27, they formally notified the relevant local government office that the man’s legal status had been restored. Only then could frozen bank and crypto accounts be accessed for restitution.

Working directly with defence lawyers, victims and a cryptocurrency exchange, prosecutors arranged for the sale of the defendant’s frozen digital assets. About $60,000 was repaid to victims.

“While strictly investigating the case, we will strive to protect the human rights of the parties as a representative of the public interest, and we will do our best to handle the case so that the dispute is resolved through the recovery of the actual damage,” the prosecutor’s office said.

Crypto crime

The episode captures the quirky — and complicated — intersection of crypto, cross-border enforcement and domestic law in South Korea, one of the world’s most active digital asset markets.

It also lands at a sensitive moment for the country’s authorities.

In recent weeks, South Korean law enforcement has faced public scrutiny over a string of crypto-related blunders.

A senior police officer was sentenced to six years in prison for taking about $90,000 in bribes from suspects linked to gambling and crypto fraud investigations.

In another case, officers in Seoul’s Gangnam district lost 22 Bitcoin — worth about $1.4 million — after failing to transfer seized coins into a police-controlled cold wallet.

Separately, the National Tax Service accidentally published seed phrases for confiscated crypto wallets in a press release image, enabling an anonymous actor to drain assets reportedly worth up to $5 million.

Lance Datskoluo is DL News’ Europe-based markets correspondent. Got a tip? Email him at lance@dlnews.com.