An estimated 2,600 South Koreans who thought they were investing in an initial coin offering backed by booty from a sunken Russian ship have learned the meaning of the term “fool’s gold.”

South Korean police said all those people invested around 9 billion won, or slightly more than $8 million, in the South Korean company Shinil Group, which claimed to have discovered a shipwreck containing gold worth $130 billion.

According to the Korea Herald, those investors put their money into tokens known as the Shinil Gold Coin, which the South Korean firm claimed would be backed by the treasure from the wreckage of the Russian warship Dmitri Donskoi. The ship was scuttled off the South Korean coast following combat with the Japanese in the 1904-1905 Russo-Japanese war.

According to CCN, plans by the Shinil Group to conduct an ICO were announced in mid-July after the company claimed in a YouTube video it found the ship containing 200 tons of gold coins and 5,500 boxes of gold bars.

But Shinil, a relatively new company that didn’t even have its own website, never applied for the salvage rights to the vessel with South Korea’s government. This was one of many red flags.

According to regulators, there might be even more victims of this pirate scheme out there. Read more here.

ThirtyK Staff
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