The successful use of artificial intelligence by the South Korean police has helped them to hunt down the cryptocurrency Ponzi scheme. The Ponzi scheme has fooled 56000 people for $18.7 million. As reported by a local newspaper on 8th April.
The scheme had its focus on senior citizens within the age group of 60-70 and people who have little or no knowledge of cryptocurrencies. They had tempted them with juicy returns and free digital currencies as per the report.
Seoul special police branch of public safety has unveiled the scheme. Till now they have arrested 12 people. The two CEOs of the Scheme got arrested bears the surname, Lee and Bae. The CEOs of the Ponzi scheme was arrested after the police took help from AI to understand the keywords used by them. The keywords used by them were related to referral bonus, risk factors, and guaranteed income.
The Ponzi scheme was operated from 201 different offices. They were offering significant incentives to their employees who were bringing new people to join the project. The company earned a substantial income by selling unlisted cryptocurrency, M-Coin at $0.87 for each.
The scheme also raised money from membership fees which range from $287-$683 depending upon the membership pattern. For every new joiner, the scheme promoters were promised $100.
The police have said as soon as the investigation started the company transferred their funds to other countries and hid the computers in the car trunk and only used them when needed. After the scheme entered the police radar, they tracked one of their meetings. The presentations and meetings were mainly attended by those who are in their 60s and 70s.
The CEOs of the scheme tried to keep the information of the company tight when they found they were under the police radar. They even moved to private houses. They took all possible steps to keep the scheme running. They also had launched a shopping website meant for its members only to lure the innocent people.
ICOs has always remained the source of cryptocurrency scams, but the good sign is that police and lawmakers are taking enough steps to prevent them. Successful use of AI can help them a lot. With the broad adoption of these two technologies regulators may not have to break their heads in regulating cryptocurrencies.
Now many people are gaining faith in the crypto industry, but it is always better to collect all the necessary information before investing in them.
