Top Korean paper knew its award went to $3B crypto scam, victims say

On the first day of a dramatic National Assembly audit in Seoul, lawmakers demanded a special investigation into the KOK cryptocurrency scam that may have been promoted by South Korea’s right-wing top daily paper, the Chosun Ilbo.

According to Aju Press, a coalition of victims is accusing two subsidiaries of Chosun Ilbo of promoting the crypto despite knowing that it was fraudulent. Jin Eun-ja, the coalition’s leader, believes these positive promotions were then used by scammers to reassure concerned investors that KOK was legitimate — and that the newspaper contributed to a delay in prosecution.

It’s estimated that KOK has caused 4 trillion won ($2.97 billion) in damages in South Korea alone.

South Korea’s investigation into the KOK crypto fraud is led by the Ulsan District Prosecutor’s Office and has been ongoing for several years. No significant breakthroughs have been made, but South Korea is still awaiting the extradition of a major KOK suspect known only as ‘Mr. Han.’ He was arrested in the US earlier this year and is reportedly gambling with victims’ cash while out on bail.

The coalition of victims have therefore called for a separate, more thorough probe to expedite accountability — sentiments which were reportedly echoed by Democratic Party lawmakers Yang Moon-suk and Min Hyung-bae during the audit on Monday.

KOK was once worth $7 and now trades for almost nothing.

Read more: Do Kwon was leverage in South Korea airport deal, ex-minister claims

Chosun Ilbo gave grand prize to KOK crypto scam

The KOK token attracted nearly 2 million investors worldwide from 2019 to 2023. Korean movies and games provided on its content platform, KOK PLAY, could be consumed with KOK tokens, which in turn could be exchanged for bitcoin at a 7-12% commission.

Investors would also receive commissions for luring in other investors, essentially operating as a Ponzi scheme and multi-level marketing scheme.

According to Aju Press, an important KOK milestone was reported on by Chosun Ilbo’s business news arm, IT Chosun, back in April 2022. Two months later, KOK was awarded a grand prize for “consumer satisfaction” by another subsidiary, Digital Chosun.

This is not the first (or second) time that the newspaper has faced allegations of wrongful reporting. Its former editor Song Hee-young was accused of receiving 100 million won ($72,000) from a shipping firm and its PR agency in exchange for favorable coverage and a luxury trip to Europe.

In a twist of events, Song was sentenced to one year in prison and two years probation before an appeals court found him not guilty. This decision was then overturned by the Supreme Court in March; the high court is expected to reopen his case.

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