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South Korean Police Used AI to Bust a $19 Mn Crypto-Fuelled Ponzi Scheme

April 08, 2019 17:40
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South Korean police have cracked a crypto Ponzi scheme with the use of artificial intelligence (AI) and have arrested the suspects running the scheme. The crypto Ponzi scheme has reportedly stolen $18.3 million from over 56,000 investors in six months period in 2018.

So, How they Scammed People?

The scam, called “M-Coin” targetted people with lesser knowledge of the technology around cryptocurrency, that comprises mostly elderly, retirees, and housewives. The scheme promises of free cryptocurrency and recruitment bonuses for signing up others.


The scammer recruited M-Coin member for a yearly fee of $288 or with a premium membership fee of $864. And, signing up for 10 years meant discounts on everything possible including funerals and marriage. Scammers rewarded participants with unlisted and worthless cryptocurrency, M-Coin.

The Crypto Ponzi scheme was operated across 201 business offices and each office managers were rewarded heavily for adding each additional investor and members were also rewarded if they brought more investors.

How Police Used Artificial Intelligence?

Special artificial intelligence investigator unit of police was able to learn the AI pattern of Ponzi schemes using keywords like Ponzi, loan, recruiting members which allowed to identify advertisements and other content.

Hong Nam-ki, section chief of the bureau’s second investigation team told the local publication house:

“The program can also identify advertisement patterns and identified the enterprise in question, which [was caught] with evidence provided by an unnamed informant.”

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