South Korean police have arrested three men in connection with a cryptocurrency fraud that defrauded investors of roughly 12.3 billion won, or about $8.6 million, in XRP tokens. A fourth suspect remains at large overseas, and authorities have requested an Interpol Red Notice to locate and detain the individual pending extradition.

The Seoul Metropolitan Police Agency’s cyber investigation unit announced the arrests on July 30, 2026. The group is accused of running a fake investment website that impersonated the Flare Network and its FXRP token, which allows XRP holders to participate in decentralized finance applications while retaining their original assets.

How the Fraudulent Platform Operated

Investigators said the suspects launched the website Fxrpntwork.com, styled as FXRP Network, between October 16 and 23, 2025. The timing coincided with heightened interest in Flare’s FXRP mechanism, which enables users to lock native XRP and receive an equivalent amount of FXRP for use in DeFi protocols.

The platform promised full protection of principal along with fixed monthly returns of 1.5 percent to 1.8 percent. Promotional material appeared across blog posts, online articles, Naver services, Wikipedia-style pages, and YouTube channels, some of which were disguised as accounts linked to major exchanges or XRP-related topics. Authorities stated these claims of guaranteed returns were entirely false.

Victims were directed to move their XRP from domestic South Korean exchanges to an overseas exchange and then onward to wallets controlled by the operators. Once the transfers were completed, the website was shut down and the funds disappeared. The site operated for slightly more than one week. During that period, 71 investors transferred approximately 3.4 million XRP.

Investigation Timeline and Asset Recovery

The probe began in late October 2025 after police received intelligence about rising cryptocurrency-related fraud and an overseas exchange flagged suspicious transactions. Within three days of the initial report, investigators traced the movement of the digital assets and froze wallets linked to the suspects, limiting further losses.

Blockchain analysis later showed the suspects’ wallets handled digital assets valued at about 27.3 billion won, or roughly $19 million. Authorities froze approximately 17.3 billion won, or $12.1 million, on foreign exchanges. An additional 10 billion won remains unaccounted for, raising the possibility of unidentified victims beyond the 71 already confirmed. Confirmed losses averaged around 173 million won per victim, with at least one individual reporting a loss exceeding 1 billion won.

Police arrested the alleged ringleader after he returned to South Korea from overseas. Two other suspects were taken into custody while attempting to evade arrest in different parts of the country. The three men are in their late twenties and thirties. Two face aggravated fraud charges and have been referred to prosecutors.

Authorities also urged the public to approach unverified high-yield investment offers with caution and to verify the authenticity of any platform before transferring funds.

Broader Context of XRP Ecosystem Scams

Following the arrests, XRP Ledger validator Vet publicly cautioned the community about the risks accompanying the expansion of decentralized finance activity on the XRP Ledger. While acknowledging the legitimate potential of upcoming lending protocols, Vet noted that such developments can also inspire fraudulent staking, lending, and yield schemes that exploit investor interest in new ecosystem features.

The case forms part of a wider enforcement effort in South Korea targeting cryptocurrency crime. Police, financial intelligence units, and regulators are increasing coordination, including expanded powers to freeze accounts, enhanced monitoring tools, stronger anti-money-laundering measures, and greater cross-border cooperation.