Sunken Warship 'Worth Billions in Gold' Is Likely Part of a Cryptocurrency Scam
Choi Yong-seok, CEO of Shinil Group, looks at video footage taken by a submersible of the shipwreck (possibly the Dmitri Donskoi warship), during a news conference on a Russian ship in Seoul on July 26, 2018.
Credit: Jung Yeon-Je/AFP/Getty Images

In July, reports of a Russian warship that was discovered by a South Korean company and rumored to contain $132 billion worth of gold briefly made headlines and nudged stock investments. As it turns out, however, it was very likely a cryptocurrency scam, according to recent news reports.

The Dmitrii Donskoi ship sank during the 1904-1905 Russo-Japanese War off of a Korean island. Over the years, rumors emerged that the ship contained lost treasure. [Image Gallery: Shipwreck Alley's Sunken Treasures]

Last month, the South Korean company, called the Shinil Group, took photographs of an underwater stern and various parts of a shipwreck and posted a video online with declarations that the group had discovered the Dmitrii Donskoi ship. Better yet, company representatives said, they had seen a treasure box on board, according to Gizmodo. The company further announced plans to apply for salvaging rights from the South Korean Ministry of Oceans and Fisheries.

Officials and other experts were leary of the company's claims from the start — and, it turns out, rightly so.

At a July 26 news conference, the president of the company, Choi Yong-seok, said there's no way to tell if there is actually gold on board and that the company had made such claims based on media reports and speculation, according to Gizmodo. To make matters weirder, he said he'd become the company's president just a few hours before the conference and that most of his leadership team had resigned.

Last week, the Yonhap News Agency reported that police had interviewed Choi and the previous president of the company, Rhu Sang-mi. The police suspect that the company's Singapore-based affiliate attempted to sell investors cryptocurrency based on the proposed value of the shipwreck. The company allegedly told investors that 200 units of cryptocurrency would turn into 10,000 by the end of September, according to the Yonhap News Agency. So the "shareholders" of the Shinil Group who were to receive portions of the money from the treasure were actually people who were buying its cryptocurrency, according to Gizmodo.

The police suspect this alleged fraud was led by Rhu and his brother Rhu Seung-jin, who left South Korea in 2014 amid an unrelated allegation of fraud and is thought to be in Vietnam. Authorities requested he be put on the international wanted list, according to Gizmodo. Since then, the company has taken down its YouTube video of the wreckage, and its website is down.

Originally published on Live Science.