Business & Finance

Korea Engulfed in Another Crypto Controversy, the Shinil Gold Coin

Following the major hacks of last month on the crypto exchanges, Korea becomes a target of yet another crypto controversy with a scam linked to the crypto investments. As stated by the local news source, Korea JoongAng Daily, the authorities in South Korea are currently investigating a scam put together by the Shinil Group, a Seoul-based organization, in order to attract investments in its own native cryptocurrency framework, the Shinil Gold Coin.

The group had announced that it had found the remains of a Russian warship holding gold worth of $130 billion. It was claimed by Shinil that a Russian armored ship, that sank back in 1905 near South Korea’s Ulleung Island during World War 1, was found by the the organization containing massive amounts of gold in it. The company’s official also disclosed a video footage of ship found with the name “Donskoi” minted on it.

Rumors suggest that this was all done deliberately by the group in order to attract investors to buy the company’s own native cryptocurrency. It was announced by the company that it would reimburse the investors of the project with the gold, although it had not provided any evidence of owing it at that moment. As a result of this promise, Shinil attracted a plethora of investors from the crypto market with an approximate number of 100,000 investors being interested to buy the company’s cryptocurrency, and attracted a staggering amount of almost $54 million in investments. Despite no evidence proving the ownership of the gold by the company, investments worth of billions poured into company’s own cryptocurrency framework, known as the Shinil Gold Coin.

After the initial announcement of finding out gold of worth $130 billion, the company back-tracked on its own declaration with Shinil’s Cheif Executive, Choi Yong-seok, stating that:

The reports said the Donskoi held 200 tonnes of gold but that would only be 10 trillion won at current value. We apologize to the public for the irresponsible citation.

In a media briefing, it was hinted by the CEO of Shinil Group that the ship might not contain anything of value, and alongside the statement, many local media outlets began questioning the validity of the claims initially made by the company.

After the indication made by the current CEO of the Shinil Group, a travel ban was imposed on the company’s head by the district police of Gangseo in Seoul and the company’s head Choi, is currently being questioned in regards to the investigation being carried out linked to the scam.

According to the report put forward by the Korean news source, the involvement of the head of a Singapore-based affiliate of the Shinil Group, Yu Ji-beom has also been highlighted in the scam. Previously, Yu’s background has been not-so-transparent with his acquaintances revealing that he had been involved in a real estate fraud in the past. Yu was one of the leading force behind the establishment of Donskoi International Exchange, and spreading the news of the ship wreck being found by the Shinil group with heavy amounts of gold on it. It has been disclosed in the report that Yu Ji-beom has been avoiding the investigation by staying in Vietnam as of now.

There might be a bigger force at play here regarding the scam. Shinil group might be involved in gaining profit from the fluctuations that happened in the share prices of Jeil Industries.

As Ryu Sang-mi, former head of the Shinil group, became the second largest shareholder in the steel company, the price of Jeil Steel spiked up by a staggering 30% on July 17. But as soon as Jeil declared that it was not linked to Shinil’s project, it saw a sudden nosedive in its value. The Financial Supervisory Service (FSS) also took notice of the situation because in the same month earlier, both the current and the departing heads of the Shinil Group bought stakes in the shares of Jeil steel which saw a sudden up rise. After the departure of Ryu as the CEO of the Shinil Group, Choi will be leading the charge of the company.

The biggest twist took place in the story when the claims made by the Shinil Group about finding the wreck carrying gold of worth billions were denied and contested by the the Korea Institute of Ocean Science and Technology and Dong Ah Construction Industrial, a government-led organization. It was disclosed by the institute that the claims made by the Shinil Group were false, and the discovery of the wreck actually took place back in 2003. This made the situation worse as the doubts about the authenticity of the Shinil group began to circulate. But later on, it was argued by the Shinil Group that the discovery that took place in 2003 was of a different wreck, and the wreckage that they found was legitimate.

In a nutshell, amidst all the illegal activities that have been percolating around the crypto space, Korea has become a center for controversies and illegal activities linked with the crypto world with another crypto scam at hand. The investigation is still ongoing, but it has certainly shook the crypto space in Korea.

Ahsan Khalid

Blockchain Developer. An Electrical Engineer with majors in software development. I present forward my insight regarding the latest happenings of the blockchain world. All views on my articles are my own. Email: ahsan@blockpublisher.com or editor.news@blockpublisher.com

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