South Korean police have dismantled a crypto Ponzi scheme that used a sham volunteer organization to build trust with victims, then fleeced them of roughly $29.6 million. Seven suspects – including a Chinese national in his 50s identified only as “A” – have been sent to prosecutors in custody on charges of fraud, organizing a criminal group, and violating financial regulations, the Gyeonggi Nambu Provincial Police Agency announced July 15.
The scheme operated between December 2024 and March 2026, targeting 436 people who collectively lost 40.9 billion won (about $29.6 million). Victims were sold a proprietary token called AIXT Coin, which police say had no actual market value. It could only be traded inside an app the group controlled.
To lure investors, the ring created a fake volunteer club named Brilliance Team. Members stole photos from social media to build fake personal relationships, then showed up at senior welfare facilities and wildfire recovery sites – participating in real volunteer work to gain credibility. Once trust was established, they pitched AIXT Coin as a guaranteed principal investment promising returns above 1,000%, with a supposed listing on a major overseas exchange imminent.
The operation ran on a classic Ponzi structure. Early investors were paid with money from new recruits, and those who saw quick gains were encouraged to bring in friends and family. The group set up 11 branches across South Korea and held investment briefings featuring fake “coin experts,” targeting the elderly and wealthy individuals. As the fake exchange listing date approached, the ring closed all branches at once and vanished.
Police launched an investigation in March after receiving intelligence. Travel bans were imposed, and searches at 15 locations nationwide led to the arrests. Authorities analyzed more than 5,700 bank accounts opened under borrowed names and froze 560 million won ($405,000) in virtual assets traced as criminal proceeds. Even after the investigation began, the suspects tried a second scam – contacting some victims claiming they could help recover their losses.
“Coin investments that promise guaranteed principal or high returns should be treated as suspected fraud,” a police official said. They warned investors to be especially cautious if urged to invest through open chat rooms or told to install private trading apps.
The case underscores a recurring pattern in crypto fraud: using social engineering and fake philanthropy to bypass skepticism. For traders, the warning is straightforward. Any token that can only be traded on a proprietary app, with no real exchange listing and outsized return promises, is almost certainly a scam. Police continue to investigate whether additional victims or accomplices exist.
South Korean Police Bust $29.6M AIXT Coin Scheme Targeting 436 People
South Korean police dismantled a Ponzi scheme that used a fake volunteer group and personal relationships to sell AIXT Coin, a digital coin with no real market value, leaving 436 people with roughly $29.6 million in lost funds. Seven suspects were sent to prosecutors, while early investors were paid with money from later recruits.