South Korean Startup Scams Crypto Investors with Fake Gold Offer

A South Korean startup, Shinil Group, may have got itself into trouble after the police in South Korea began probing it last week.  The claim was about 130 trillion Won ($116bn) worth of gold that the group first claimed to have found on the shipwreck of Dmitri Donskoi, a Russian armored ship, according to a local news outlet.

The South Korean police started investigating after Shinil Group suddenly changed its claim that they had not seen any gold bars, that they had only seen boxes that probably contained either Russian gold. With that, the firm readjusted the estimated worth of any possible treasure to 10 trillion Won, just a little less than $9bn. This happened on the last month with the CEO of the company, Choi Yong-Seok stating that “The reports said the Donskoi held 200 tonnes of gold but that would only be 10 trillion Won at current value. We apologize to the public for the irresponsible citation.”

It turned out also that the startup company had no official website or even a Twitter account and was even worth less than the amount it would cost to apply for salvage rights, which are about 10% of the treasure haul.

Things seem to be even more dangerous than they seem because Shinil Group has already promised a crypto token to its investors that has earned the firm 60 billion Won (about $54 million) from more than 100,000 investors. One unit of this ‘Shinil Gold Coin’ should worth 10,000 Won, about $9.

It is now suspected that all Shinil Group’s claim is actually a scam just to get money from its investors, and the authorities have banned Choi Yong-seok from leaving the country.

The saga started when Shinil Group shared a video on YouTube on July 16 of footage of a shipwreck which they had found near the island of Ulleungdo, between South Korea and Japan. Immediately, they followed that up the next day with a press release, telling the press of the treasure they had “found.”

Dmitri Donskoi was a Russian battle vessel that was lost in May 1905 during the Tsushima Battle between the Japanese and Russia. The ship was said to have scuttled by its crew before the Japanese could lay their hands on its contents. The vessel which been on the radar of under-sea hunters for decades could contain one the richest hauls of shipwrecks found yet.

But whether Shinil Group will enjoy 10% of the worth of goods found on the damaged ship remains a question of whether the South Korean police can ascertain the genuineness of the claim of the startup.

Never miss out on our daily crypto news, stories, tips, and price analysis.  Join us on Twitter | Telegram | Facebook or subscribe to our weekly Newsletter