Korean Police Raid Crypto Startup Selling Treasure from $130 Billion Shipwreck
South Korean police raided the offices of the Shinil Group, a company that claims to have discovered a shipwreck carrying $130 billion in gold, and attempting to sell cryptocurrency tokens backed by the treasure.
According to a report published on August 7 by the Korean Herald, 27 investigators from the white collar crimes unit of the Seoul Metropolitan Police Agency raided the offices of the Shinil Group in Yeouido, west Seoul, as well as seven other locations to gather evidence of an alleged initial coin offering (ICO) scam.
The Shinil Group first claimed on July 15 that the company had found the wreck of a Russian warship called the Dmitrii Donskoi, a vessel sunk during the Russo-Japanese War in 1905. Shinil Marine presented footage, allegedly taken by a submarine, of the warship’s hull and wreckage, which they located near the island of Ulleungdo, in South Korean territorial waters east of the Korean peninsula.
Russian historical records indicate that the warship had been carrying over 5,500 boxes of gold bars and 200 tons of gold coins, a treasure that may be worth an estimated $130 billion today. According to the Korean Herald, a Singapore-based affiliate of the Shinil Group then allegedly tried to sell investors a cryptocurrency “based on the potential value of the shipwreck,” saying “the coin's value will jack up to 10,000 Won ($8.94) by the end of September this year,” up from an initial value of 200 Won ($0.18).
The Shinil Group then held a second press conference, in which they adjusted the value of the treasure down to 10 trillion won ($8.94 billion). However, documents presented to the government for excavation approval listed an estimated value of only 1.2 billion Won ($1.07 million).
South Korean police began investigating the Shinil Group last week, even issuing a travel ban on CEO Choi Yong-Seok, adding that Interpol had accepted a request to list Choi and another key participant in the alleged scam on its Red Notices list.