A spectacular story from South Korea has been making the rounds lately, regarding an investigative unit which recently relied on artificial intelligence (AI) to take down a group of criminals.
However, this artificial intelligence should not be mistaken for some South Korean RoboCop-esque crusader keeping the streets clean. Rather, this AI was a keyword targeting software which helped uncover and bust a $19 million Bitcoin Ponzi scheme.
56,000 people are said to have been swindled out of $18.7 million
Specifically, around 56,000 people are said to have been swindled out of approximately $18.7 million by a group of South Korean fraudsters.
Moreover, the local news publication the Korea Joongang Daily reports that those behind the scam specifically sought to target people who had a limited understanding of cryptocurrencies.
Those exposed are said to have mainly been people between 60 and 70 years old, according to the Seoul Special Judicial Police Bureau for Public Safety. Victims are furthermore said to have been enticed with promises of free cryptocurrency and substantial bonuses.
Nevertheless, a special investigative agency in Seoul managed to unravel this Ponzi scheme through the use of artificial intelligence. Authorities reportedly managed to arrest 12 people responsible for the scam using a keyword-targeting AI developed by the Seoul Special Judicial Police Bureau for Public Safety.
The Ponzi scheme relied on an unlisted cryptocurrency called ”M-coin”
The bureau’s section chief, Hong Nam-ki, elaborated on how the agency had designed this AI in order to unravel this fraudulent venture:
”Through keywords such as Ponzi, loan and recruiting members, we were able to teach the AI patterns of Ponzi schemes, the program can also identify advertisement patterns and identified the enterprise in question, which [was caught] with evidence provided by an unnamed informant.”
The scope of this particular Ponzi scheme is said to have been quite extensive. It had reportedly run te scam since May of 2018, and had around 201 offices from which it operated.
Furthermore, the CEOs of the venture – known only as Lee and Bae – had supposedly promised investors that an unlisted cryptocurrency known as M-coin would rise to $0.52, before offering to sell them M-coin for $0.087 per token, a fraction of the price.
This is not the first time a traditional Ponzi scheme has affected unknowing investors, and it is not the first time Ponzi scammers have tried to ride the cryptocurrency trend. Moreover, it is also likely not the last time.
However, the use of AI to catch these fraudsters presents a promising development. If such technology is effectively and successfully deployed on a large scale, it could offload overstretched law enforcement officials and hopefully prevent more of these scams.
Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the blockchain industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.