Flare Network staking scam drained $8.5 million in XRP, police say
Seoul police say a fake FXRP staking site stole 3.4 million XRP from 71 investors and led to fraud charges against three people.
By Dev Ramirez · Crypto Correspondent
· 3 min read
Seoul police say a Flare Network staking scam stole 3.4 million XRP from 71 investors in just eight days, a hit valued at 12.3 billion won, or about $8.5 million. For retail crypto holders, the case is a reminder that fake staking offers can look researched, branded and supported by online content before funds ever leave a wallet.
Local outlet Chosun reported Thursday that two 29-year-old men were sent to prosecutors on aggravated fraud charges. Police said a third person, a 34-year-old paid stand-in who appeared in promotional material, has also been charged with fraud.
According to police, the website Fxrpntwork.com posed as Flare Network and FXRP, both described as legitimate projects. The site offered monthly returns of 1.5% to 1.8% and claimed investors’ principal would be guaranteed.
How did the fake Flare Network staking site work?
Police said investors were told to move XRP from domestic exchanges to overseas platforms and then into wallets controlled by the group. The site went offline on October 23, after which the operators disappeared, according to investigators.
Staking generally means locking up crypto to help support a blockchain network or related system in exchange for rewards. In this case, police allege the offer was not a real staking product, but a fraud using the names of Flare Network and FXRP to gain credibility.
Investigators said the group built what looked like outside validation before victims sent funds. Police said false information was placed on portal blogs, online news articles and Wikipedia, while YouTube videos featuring the paid stand-in gave the project another layer of apparent legitimacy.
The timing also mattered. Police said the scheme followed the actual FXRP launch by one month, which may have made the fake site easier to mistake for a real opportunity tied to a known project.
Police traced more than the known victim losses
Seoul police put average losses at 173 million won per victim, or about $119,000, during the week the fake site was active. Investigators said they traced 27.3 billion won, about $18.8 million, through wallets linked to the group.
That total is higher than the 12.3 billion won confirmed lost by the 71 known victims. Police said the gap suggests there may be additional victims.
Police said they froze 17.3 billion won in assets across overseas exchanges after detecting the scheme. Another 10 billion won moved during the investigation and has not been accounted for, according to investigators.
An overseas exchange alerted police last October to a rise in staking fraud, Khan reported. Investigators later carried out 54 search and seizure warrants, arrested one suspect after he returned from abroad and detained others in sequence, according to police.
A fourth 29-year-old man remains overseas and is the subject of an Interpol Red Notice, police said. None of the four has gone to trial, and police have not publicly identified them.
South Korean investigators have pursued several crypto-related cases this year, including June charges against 23 people over the alleged laundering of $11.1 million in USDT tied to a Cambodia-based phishing ring. Police said they would apply “zero tolerance” to crypto fraud and urged investors to verify offers through official channels before sending money.
This story draws on original reporting from Decrypt.
