South Korean prosecutors dismantle $1.93B crypto romance scam posing as Elon Musk associates

South Korean authorities have broken up a Cambodia-based criminal syndicate that defrauded victims of more than $1.93 Billion Korean Won using the narrative of being associates of billionaire Elon Musk and offering interested investors a share of SpaceX.

Operating from Poipet, Cambodia, the group posed as wealthy young women on messaging platforms, claiming to be relatives of Musk and were working alongside him at Tesla and SpaceX. Using these fabricated personas, they lured victims into phony SpaceX investment schemes.

Using the counterfeit SpaceX mobile application, the criminals intercepted investment funds, and channelled the money through local criminal networks into Korean Won.

Victims were lured into the scam by carefully scripted conversations that made them drop their guards and put their money into fraudulent investment opportunities that were supposedly tied to SpaceX's market reputation.

The criminals also created counterfeit SpaceX applications that victims were instructed to install, creating the illusion of legitimate transactions while funds flowed directly to the criminal network.

The operation also demonstrated foresight in anticipating law enforcement scrutiny. Members prepared false testimonies, claiming they were coerced victims brought to Cambodia under the guise of job opportunities — an attempt to evade accountability.

A joint investigation by prosecutors, the national police, and the Korea Immigration Service tracked the group for eight months and identified 20 Korean nationals among its ranks. While 11 suspects were apprehended, seven remain at large.

Pig‑butchering and crypto romance scams on the rise

This case forms part of a broader wave of “pig‑butchering” scams, in which fraudsters combine emotional manipulation with fake investment opportunities. Such schemes increasingly rely on AI-generated personas, deepfake videos, and counterfeit trading platforms to sustain deception over extended periods.

In one recent South Korean example, a man in his 50s lost 105 million won after six weeks of daily conversations with a woman posing as Japanese, who guided him to a fraudulent crypto exchange and pressured him into additional payments for fabricated taxes.

Chainalysis reports that crypto romance scams drained more than $5.5 billion globally in 2024, spanning nearly 200,000 incidents. U.S. authorities seized over $225 million tied to similar operations last June, while Australian regulators shut down 95 pig‑butchering-related companies, recovering $35.8 million for victims across 14 countries.

South Korea’s crypto market, valued at roughly $130 billion, remains particularly vulnerable despite high adoption rates. For instance, Jeju police arrested 25 individuals tied to four fake-exchange rings in May 2025, which collectively defrauded 48 victims of nearly $540,000.

Experts Urge Vigilance And Awareness

Cybersecurity specialists emphasize that as blockchain technology hardens, human susceptibility has become the primary attack surface. Mitchell Amador, CEO of Immunefi, noted:

“As code becomes less exploitable, the main attack surface in 2026 will be people.”

Navin Gupta, CEO of blockchain analytics firm Crystal, explained the psychological mechanics behind these scams:

“Scammers impersonate figures of authority—project founders, influencers, even support staff—to create the illusion of legitimacy. Assume every unsolicited message is a potential attack. That mindset alone filters out 80% of threat vectors.”

As crypto romance schemes continue evolving, authorities and experts agree that awareness, skepticism, and cautious digital behavior remain the strongest defenses against these emotionally manipulative frauds.