South Korean police have arrested three people over an alleged cryptocurrency investment scam that targeted 71 investors and siphoned roughly 3.4 million XRP, valued at about $8.5 million, through a fake staking platform impersonating Flare Network.
The Seoul Metropolitan Police Agency’s Cyber Crime Investigation Unit announced the arrests on July 30, saying investigators had also secured an arrest warrant and requested an Interpol Red Notice for an alleged ringleader who remains overseas.
Police said the wider network moved cryptocurrency worth approximately $19 million through wallets connected to the operation. Investigators managed to freeze about $12 million worth of XRP and Tether held on foreign exchanges within three days of receiving an initial tip. Around $7 million remains unrecovered.
Fake Flare platform targeted XRP holders
The fraudulent website operated for only eight days, from October 16 to October 23, 2025, according to police. It was designed to resemble Flare Network’s FXRP ecosystem and promised investors protection of their principal alongside fixed monthly returns of between 1.5% and 1.8% on deposited XRP.
Authorities said the operators promoted the platform through an extensive campaign that included fabricated Naver blog posts, online articles, Wikipedia pages and YouTube videos. Some videos allegedly featured paid actors posing as successful investors.
Victims were instructed to move XRP from domestic exchanges to wallets designated by the operators through an overseas platform. Once the transfers were completed, the fraudulent website disappeared and the operators allegedly cut off contact.
Two of the arrested suspects face charges of aggravated fraud and violations of South Korea’s Similar Reception Act. A third suspect has been referred to prosecutors, while authorities continue searching for the alleged ringleader.
The scheme appears to have exploited growing interest in Flare’s legitimate FXRP project. FXRP, a non-custodial wrapped version of XRP, launched in September 2025, giving the scammers an opportunity to build a convincing imitation around a genuine crypto ecosystem.
The case highlights a recurring threat in digital asset markets, where fraudsters can exploit well-known protocols, emerging products and investor demand for yield to make counterfeit platforms appear legitimate.
South Korean police said they would maintain a zero-tolerance approach toward cryptocurrency-related cyber fraud and urged investors to be wary of platforms offering unusually high fixed returns.
The investigation remains active as authorities attempt to recover the remaining assets and determine whether additional individuals were involved.
