Without any shipwreck proof, Seoul-based Shinil Group raised more than $53 million from investors. Police authorities from South Korea are investigating the potential crypto investment scam. The group allegedly made assurances to pay gold to their investors from a sunken Russian wreck.

The Shinil Group is the central figure of this cryptocurrency scam. Earlier this month the group stated that it found the Dmitrii Donskoi, a Russian warship. This ship sunk around 113 years ago following a marine clash with Japanese warships near Ulleung Island in South Korea. They further stated that the wrecked ship contained gold worth 150 trillion won ($131 billion USD).

Own Cryptocurrency Introduced

The Shinil Group purportedly set in motion its own cryptocurrency, known as Shinil Gold Coin. To encourage and attract investors to buy the start-ups own cryptocurrency, they promised to reimburse them with gold. Though, Choi Yong-Seok, the CEO of the company, admitted that he has no clear proof if the ship contains any valuables. In spite of this, the company attracted investments from approximately 100,000 people from Gangseo. The District Police of Seoul, later on, issued a travel prohibition on Choi. They are planning to interrogate him and others with links t0 the investigation. The Korea JoongAng Daily states that the chief of a Singapore-based partner of Shinil Group, Yu Ji-beom’s, also has involvement in the fraud.

Shipwreck Postings On Social Media

Choi created the Donskoi International Exchange and posted news on social media with regard to the shipwreck. It is alleged that he also posted on social media images and pictures of the fake shipwreck. Based on the info from his associates, it is believed that Yu was convicted of a scam in realty. He is at present in Vietnam so that he can avoid the investigation sources stated.

Share Price Fluctuations Investigation

Investigations are underway by authorities to figure out whether the suspects of the start-up attempted to make a profit on Jeil Industries, a steel company, after their stock saw its share price fluctuate. Jeil share prices in the South Korean stock market zoomed by 30% earlier this month. This was because of news on the former leader of Shinil Group, Ryu Sang-mi. Ryu purchased enough shares to become the 2nd largest company shareholder. Following a fall in the share price, Jeil asserted that it was unrelated to Shinil’s shipwreck project.