A fruitless long legal battle is likely as the kingpin of the pyramid-style sales network of cryptocurrencies died this week, leaving more than 4,000 investors puzzling over whereabouts of their investment fund of up to 40 billion won (about 39 million U.S. dollars).
Now angry investors are filing a series of lawsuits against the family members and intermediaries and brokers to get their investment refunded.
However, the price of Ethereum these investors bought fell 90 percent between May and now. Middle brokers say they would return 10 percent of their investment in a goodwill gesture although they are also victims of the diseased pyramid ringleader.
They might receive 1 percent of their original investment at best as brokers promised to return 10 percent of their investment and the Ethereum price fell by 90 percent.
This type of scams involving initial coin offering is nothing new in South Korea. The ringleader hires brokers who sell cryptocurrencies and get commissions. When the cryptocurrency market is bullish, investors have a great chance of generating huge gains. However, the problem became serious when the market nosedives.
The ringleader lavishes part of the investor funds out of the false belief that coin prices would rise by double-or triple-digits. The leader surnamed Choi dies two days ago.
He advertised and collected money from investors for buying such cryptocurrencies as Aergo, NEX, QKC, TUC, Bgogo, and OASIS. All of these coin prices fell dramatically. He allegedly invested the fund into Chinese venture capitalists, who allegedly returned the money to the late Choi. However, Choi died suddenly. Who hid the money? Investors claimed that his family members should shoulder responsibility.
Wall Street cryptocurrency analyst Thomas Lee told the Block Media last week that about 30-40 percent of ICOs worldwide are scams. South Korea bans ICOs.
