Authorities in South Korea have reportedly filed suit against a U.S. cryptocurrency mining firm, alleging a multi-million dollar fraud.

According to Korean news source Yonhap, prosecutors from the Incheon district of South Korea alleged in a press briefing that a company called Mining Max LLC solicited 270 billion Korean won – an amount worth roughly $250 million – from investors for cryptocurrency mining activities between September of last year and this past October.

Yet that money was largely spent enriching those behind the firm, prosecutors are arguing, despite offering investors high returns on their stakes. Further, it has been alleged that the results being shown to the investors, who number some 18,000 people from 54 countries, were falsified. As reported by Yonhap, just $70 million of the $250 million raised went to mining.

Within that group, an estimated 14,000 were based in South Korea, with 2,600 in the United States and 600 and 700 in China and Japan, respectively.

Upon inquiries, Mining Max responded through email:

“We assure everyone concerned including our customers worldwide that our attorneys are fully cooperating with officials and providing any necessary information. We look forward to this process concluding as quickly as possible and anticipate that the investigation results will vindicate any allegations of wrongdoing on the part of principals of the company located in the U.S.”

According to the prosecutors, 21 suspects from the firm have been indicted, while the top executives from the firm are still at large, including its chairman and vice chairman.

U.S. presence

Public records found by CoinDesk indicate that the company maintained a presence across several U.S. states.

According to the website of Mining Max LLC, the company is headquartered in California and describes itself as a maker of ethereum mining equipment that also offers “premium cryptocurrency cloud mining rigs.”

Business records show that Mining Max LLC is registered at least in two states in the U.S., California and Nevada (where it is currently in default), with two different business addresses: 3600 Wilshire Blvd Ste 1200, Los Angeles, CA, and 6069 S Fort Apache Rd #100, Las Vegas, NV.

Both registration documents indicate that the manager and CEO of the firm is a person called Park Nam Ho. It appears that Park Nam Ho, also known as Daniel, is also the operator of another mining-related site, Cryptocurrenciesmining.com, and is the founder of a legal service named Angel Legal Service that is located at the same building as Mining Max.

Based on Mining Max’s business registration in California, that legal service is also its registration agent, having been filed by a person called Lee Jin Ho.

Editor’s note: this article has been updated to reflect the responses from Mining Max LLC.

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