Earlier this week, police in South Korea raided the offices of Shinil Group, a Seoul-based company that claimed to have discovered the wreck of the Russian battleship Dmitrii Donskoii. Previously, a travel ban had been placed on CEO Choi Yong-seok as well as other executives within the company as part of a probe into allegations of a cryptocurrency scam.

The Shinil Group Debacle Continues

One of the stories gripping South Korea by storm revolves around Shinil Group. This Seoul-based company has made some very big claims a few weeks ago. It claims they found the wreck of a Russian warship which sunk in 1905. Video evidence regarding this discovery has been shared with the world.

As is the case with most shipwrecks, it is difficult to distinguish truth from fiction. Shinil Group claims the shipwreck has a cargo containing 200 tons of gold. Through a subsidiary, the group went on to issue a new cryptocurrency. Said new currency is linked to the potential value of the shipwreck in question. Valuing this digital currency properly is very difficult. Company officials claim a fifty-fold increase in value is not out of the question.

Level-headed investors are convinced Shinil Group is pulling a major scam. A lot of details are not adding up for the company. Discrepancies in the estimated value of the treasure shared with the public and documents sent to the government raise a lot of questions. To date, it remains unclear if there even is a shipwreck at the suggested location. Even if so, there is no guarantee any valuable cargo is still on board.

Tarnishing the Crypto Reputation

The business model of Shinil Group’s subsidiary seems very strange. Creating a new cryptocurrency related to a “value” that doesn’t even exist yet is always controversial. If the company salvages the treasure and then gets speculators to invest in it, the story is very different. For some reason, the firm has not opted for this latter option.

Ventures like these show the cryptocurrency industry in an extremely negative light. Critics of Bitcoin – and cryptocurrency in general – often erroneously claim that it is predominantly used for criminal activities and this sort of debacle only adds fuel to the fire.

How the Shinil Group debacle will play out, is anybody’s guess. The firm has a lot to answer for and isn’t providing much credible evidence to back up its claims. That does not automatically make this venture a complete scam. The initial promises associated with issuing the cryptocurrency, however, may be very difficult to uphold.

Do you think that Shinil Group is trying to pull a fast one on the crypto community? What do you think about South Korea’s response? Let us know in the comments below.

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