Seoul prosecutors have taken custody of the eldest son of Thae Yong-ho, the former North Korean diplomat who became one of South Korea's most prominent defectors, over a cryptocurrency scam that police say defrauded seven victims of roughly 1.6bn won ($1.1mn).
Son of High-Profile North Korean Defector Indicted in $1.1mn Crypto Fraud
26 May 2026 - 10:26 CEST
By Oihyun Kim
Gangnam Police Station indicted the 36-year-old, identified only by his surname Thae, on charges of fraud, illegal fundraising, identity theft and embezzlement.
Police arrested him on 7 May and sent the case to prosecutors, but did not disclose the indictment publicly until more than a week later.
Father's name as bait
Police say the suspect promised returns on cryptocurrency investments between 2021 and May 2024, then diverted the funds.
He recruited victims among acquaintances and people he met online, leaning on his father's name and the family's state-granted protection to win their trust. Investigators say he repeatedly described himself as 'the son of a former National Assembly member', and boasted close ties with the police officers assigned to guard his family.
He also faces a separate embezzlement charge involving about 300mn won ($200k), taken from a publishing company run by his mother.
Police have not made public which cryptocurrencies or platforms were involved. Voice of the People, a Korean progressive outlet that first reported the case in September 2024, described the suspect as operating an informal over-the-counter broker, offering instant conversion of crypto holdings into cash for a fee. He then used victims' identities to take out crypto-collateralized loans without their knowledge.
Defected in 2016
Thae Yong-ho defected to Seoul in 2016 while serving as deputy ambassador at the North Korean embassy in London, becoming the highest-ranking diplomat ever to cross over. His family has received around-the-clock police protection since, a status reserved for defectors deemed at risk of retaliation from Pyongyang.
Police say the scheme continued even after the case became public, with additional victims surfacing during the investigation.
Thae Yong-ho did not respond to a request for comment.
Only 7% recovered
South Korea has seen mounting losses from crypto-related crime. Data from the Korean National Police Agency, released in February 2026, put cumulative damages from crypto-related illegal activity between 2021 and 2025 at 6.7trn won ($5bn). Police recovered only 0.7% of that amount.
Under the Virtual Asset User Protection Act enforced from 2024, fraud schemes exceeding $4mn can carry up to life imprisonment, though the case against Thae's son falls below that threshold.
Prosecutors are expected to decide on formal charges within 20 days.
