The Korea Blockchain Association (KBS) has advised investors of pyramid-style marketing linked to cryptocurrencies.
It said since the cryptocurrencies reached a new high in late 2017, many fraudsters have been pitching sales on alleged cryptocurrency derivatives products.
They lured investors on the false promise of returning 50-60 percent yield on investment through Bitcoin derivatives.
The association said swindlers allegedly have offices in either Korea or abroad.
The U.S. Securities Exchange Commission and the Commodity Futures Trading Commission has also warned against financial scams through cryptocurrencies.
The two regulatory agencies said the advertisement of cryptocurrency fraudsters have a few things in common;
First, they promised an unbelievably risk-free high return.
Second, they advertise a complex and arcane income structure to hide problems inherent in a financial scam.
Third, they solicit customers to invest in cryptocurrency investment even though investors do not request.
Fourth, their business headquarters are outside the United States.
Fifth, they press investors to buy now.
A KBA spokesman advised investors of checking whether American financial companies have registered themselves with the Securities and Exchange Commission