SEOUL, Sept 16 : The amount of money South Korean retail traders claim they lost through fraud rose by a fifth to about $250 million in the first half of 2026, according to police data seen by Reuters, as scammers exploited market swings to steal from investors.
Police investigated 3,506 stock tip chatroom-related cases that involved 336 billion won ($246.57 million) from January to June, the data showed. South Korea’s KOSPI was the world’s best-performing stock benchmark in the first half but lost as much as 44 per cent from its June 19 peak.
While the number of cases has risen just 4.1 per cent from the same period last year, the amount of money involved is up 19.8 per cent, according to the data.
Several lawyers specialising in financial fraud told Reuters scammers tapped into investor fear of missing out on the sharp rally to convince them to part with their money. Inexperienced retail investors were particularly vulnerable, they said.
“Volatility creates favorable conditions for criminal organisations,” said Kim In-ho, an investigator at Jeongbyeok Law Firm who specialises in helping fraud victims.
While scammers in recent years in South Korea used schemes focused on cryptocurrencies and property, lawyers said, the scam playbook morphed significantly during this year’s market rally to prey on retail stock investors.
One ploy for the scammers was to leave comments on videos of well-known brokerage analysts or financial influencers to lure these personalities’ followers to private chatrooms.
Inside the chatrooms, some scammers charged subscription fees ranging from thousands to hundreds of thousands of dollars for stock recommendations, while others convinced victims to transfer money to invest.
Scammers cited the KOSPI rally, supercharged by debt-laden bets on tech stocks, as a reason to invest, one lawyer said. Each case might involve several victims, police said.
“When market volatility rises, so does uncertainty and that’s when retail investors’ psychology gets shakier,” said Lee Tae-kyung, a lawyer at Wanbong Law Firm. “These groups exploit that, telling people to trust them.”
South Korea’s financial regulator, Financial Supervisory Service, said it does not have data on illegal stock-tipping chatroom cases and that investigating such cases was the responsibility of law enforcement agencies. The regulator did not respond to questions about whether there were plans for new rules to protect investors.
‘DOUBT EVERY TIP’
Seoul police said in June they had arrested 10 people after uncovering a scam that operated from Cambodia and defrauded 59 South Koreans of about 9.9 billion won over two years to February.
Ring members impersonated securities firm staff and encouraged victims to buy AI-recommended stocks through fake apps, police said, adding the ringleader of that scam was a foreign national while call-centre personnel were Koreans.
The case has been referred to prosecutors and is awaiting a court date, police said.
Jay, a 47-year-old South Korean logistics worker, said he lost 60 million won after falling for a similar ploy in February. He asked to be identified only by his English name because his family is unaware of the money he has lost.
In February, he joined a group chat on Naver, a Korean online platform, via a TikTok video that he believed was posted by the director of a well-known securities firm.
“At the time there was a lot of discussion around not putting your money into real estate, but to put it in stocks,” Jay said. “That mood was prevalent and I got pulled along without realising it.”
While the trading chatroom initially only offered market commentary on stocks, members later started talking about big returns from investing six- and seven-figure sums through the firm’s staff.
That convinced Jay to borrow money to invest 20 million won.
Eventually, discussion turned towards what the group called a rare opportunity centered on a construction firm seen benefiting from potential post-war reconstruction in Iran. Jay sent a further 40 million won to the chatroom manager, believing he was an employee of the securities firm and that his investment could jump 600 per cent.
Shortly after that, the group went silent and shut down in April. Jay has filed a criminal complaint with the police and a civil complaint against the holder of the bank account to which he transferred the money. Reuters was unable to reach the bank account holder as Jay did not have their contact details.
Jeonbuk Bank, which hosts the account, said it was aware of ongoing fraud cases and would work to continuously improve its scam detection. Naver said it takes action against such chatrooms when it receives reports and is strengthening its monitoring.
Police declined to confirm details of Jay’s case, saying they cannot comment on individual cases.
Meanwhile, Jay has taken two side gigs to pay off his debts.
“My advice to any newcomers to the stock market is doubt every tip you are given.”
($1 = 1,362.7000 won)
