South Korean Shipwreck Probed for Potential ICO Scam

A possible ICO scam is under investigation in South Korea after a much-publicized shipwreck attracted the suspicions of local authorities.

As reported by local outlet Korea Joongang Daily on August 1, 2018, Seoul-based Shinil Group is facing the heat as a critical figure in the scam.

Earlier in July 2018, Shinil allegedly promised to pay investors in gold if they brought Shinil's native digital token.

The group revealed on July 26 they had struck treasure off a sunken Russian warship in Korean waters, holding an estimated $130 billion worth of gold.

The catch for investors to get their hands on the gold pile was to purchase a Shinil-branded cryptocurrency - which immediately raised red flags for police authorities.

The scam's cryptocurrency connection comes in the form of a digital asset exchange established by Yu Ji-beom, head of a Singapore-based branch of Shinil Group.

Yu earlier incorporated the Donskoi International Exchange in Singapore and spread information about the sunken ship on social media.

Notably, the sunken ship stated "Donskoi" in bold font on all its posts, further inciting suspicious about its alleged Russian origin.

Shinil CEO Choi Yong-Seok played down allegations and called the development an "Unverified media citing." He added no hard evidence of sunken gold exists, despite earlier stating the ship contains "Gold bars."

Police have since imposed a travel ban on Yong-Seok and other board members of the Shinil Group.