Verify a decision

{"actor":"system:backfill","investigation_id":"cb7cc964-8424-4df9-92c6-eecc3b6da661","kind":"publish","page_slug":"miningmax","published_at":"2026-05-31T19:43:08.584Z","sequence_num":1,"snapshot":{"content_type":"investigation","entity_name":"MiningMax","sections":[{"content":"MiningMax presented itself as a provider of premium cryptocurrency cloud-mining services, claiming to operate high-tech Ethereum mining rigs assembled and maintained at Internet Data Centers (IDCs) in Seoul, South Korea. The company was registered in California and Nevada and listed business addresses in Los Angeles and Las Vegas. Investors were charged a minimum of $3,200 per 'mining rig' contract and were promised guaranteed daily returns on their investment across multiple cryptocurrencies. Prosecutors and investigators allege the business functioned as a hybrid pyramid and Ponzi scheme: investors who recruited new participants received referral commissions of approximately $200 per recruit, and the scheme was structured across seven investment tiers, with higher returns promised for larger capital commitments. South Korean prosecutors allege that of the approximately 270 billion won raised, only 75 billion won (approximately $69.6 million USD) was spent on actual mining equipment, and that the generated mining output was insufficient to cover the promised investor returns from the outset. The remainder of investor funds was allegedly diverted to management's personal use, used to reward top recruiters with luxury goods including Mercedes-Benz automobiles, Rolex watches, and gold necklaces, and approximately 100 billion won (approximately $92.8 million USD) is suspected to have been transferred to offshore bank accounts. An investigation by Korean authorities further alleged that MiningMax developed and deployed software designed to simulate cryptocurrency mining activity, deceiving investors into believing returns were being generated when no actual mining was occurring.","heading":"Scheme Structure","severity":"critical","sources":[{"credibility":2,"name":"Prosecutors File Charges in Alleged $250 Million Crypto Mining Fraud — CoinDesk","type":"news_article","url":"https://www.coindesk.com/markets/2017/12/21/prosecutors-file-charges-in-alleged-250-million-crypto-mining-fraud"},{"credibility":2,"name":"Prosecutors Bust Multimillion Dollar Cryptocurrency Scam — The Korea Herald","type":"news_article","url":"https://www.koreaherald.com/article/1536590"},{"credibility":2,"name":"Multimillion Dollar Cryptocurrency Scam By Mining Max Busted In South Korea — IBTimes","type":"news_article","url":"https://www.ibtimes.com/multimillion-dollar-cryptocurrency-scam-mining-max-busted-south-korea-2630744"},{"credibility":3,"name":"Mining Max $250 Million Ponzi Scheme Shut Down, Arrests in Korea — BehindMLM","type":"news_article","url":"https://behindmlm.com/companies/mining-max-250-million-ponzi-scheme-shut-down-arrests-in-korea/"}]},{"content":"South Korean prosecutors estimated total investor losses at approximately 270 billion Korean won, equivalent to roughly $250 million USD at 2017 exchange rates. Approximately 18,000 investors from 54 countries were affected. The largest concentration of victims was in South Korea, with prosecutors estimating approximately 14,000 Korean investors. The United States was the second-largest affected country with approximately 2,600 investors, followed by China with approximately 600, and Japan and other nations accounting for the remainder. The company's website was reported to draw approximately 70 percent of its web traffic from the United States, consistent with its US business registrations.","heading":"Investor Harm and Geographic Reach","severity":"critical","sources":[{"credibility":2,"name":"Prosecutors File Charges in Alleged $250 Million Crypto Mining Fraud — CoinDesk","type":"news_article","url":"https://www.coindesk.com/markets/2017/12/21/prosecutors-file-charges-in-alleged-250-million-crypto-mining-fraud"},{"credibility":2,"name":"Cryptocurrency Pyramid Scheme Busted in South Korea — Finance Magnates","type":"news_article","url":"https://www.financemagnates.com/cryptocurrency/news/cryptocurrency-pyramid-scheme-busted-south-korea-250-million-stolen/"},{"credibility":3,"name":"Mining Max $250 Million Ponzi Scheme Shut Down, Arrests in Korea — BehindMLM","type":"news_article","url":"https://behindmlm.com/companies/mining-max-250-million-ponzi-scheme-shut-down-arrests-in-korea/"}]},{"content":"On or around December 20, 2017, the Incheon District Prosecutors' Office announced it had indicted 21 individuals associated with Mining Max LLC on charges of fraud and for violating South Korea's law on door-to-door sales. Three additional individuals were indicted without detention on embezzlement and related charges; among those three was Park Jung-woon, described in contemporaneous reports as a once-popular South Korean singer from the 1990s. Seven individuals, including the company's chairman and vice chairman, had fled South Korea and were placed on Interpol's wanted list. South Korean police had arrested more than a dozen executives and employees in early December 2017 prior to the formal indictment announcement. No publicly verifiable sources found by this investigation confirm the subsequent extradition, apprehension, or conviction of the chairman Nam Ho Park (alias Daniel Park) or the vice chairman following the December 2017 indictments.","heading":"South Korean Criminal Charges and Arrests","severity":"critical","sources":[{"credibility":2,"name":"Prosecutors Bust Multimillion Dollar Cryptocurrency Scam — The Korea Herald","type":"news_article","url":"https://www.koreaherald.com/article/1536590"},{"credibility":2,"name":"Cryptocurrency Pyramid Scheme By Mining Max Busted In South Korea — BlockTribune","type":"news_article","url":"https://blocktribune.com/cryptocurrency-pyramid-scheme-mining-max-busted-south-korea/"},{"credibility":2,"name":"Multimillion Dollar Cryptocurrency Scam By Mining Max Busted In South Korea — IBTimes","type":"news_article","url":"https://www.ibtimes.com/multimillion-dollar-cryptocurrency-scam-mining-max-busted-south-korea-2630744"},{"credibility":2,"name":"$250 Million Ethereum Mining Scam? Korean Prosecutors File Charges — CCN","type":"news_article","url":"https://www.ccn.com/250-million-ethereum-mining-scam-korean-prosecutors-file-charges/"}]},{"content":"On July 7, 2020, the California Department of Business Oversight (now the Department of Financial Protection and Innovation, DFPI) issued a Desist and Refrain Order against Mining Max LLC and its founder and managing member, Nam Ho Park (also known as Daniel Park). The order was designated enforcement action reference DBOENF-1778613964-855366. The DFPI enforcement action page confirms Mining Max LLC was registered in California and lists Nam Ho Park as the associated individual. The order required Mining Max and Park to cease their activities in California. The action followed the earlier South Korean indictments and represents the primary publicly documented US regulatory response to the scheme.","heading":"California Regulatory Action","severity":"high","sources":[{"credibility":1,"name":"Mining Max LLC Enforcement Action — California DFPI","type":"regulatory","url":"https://dfpi.ca.gov/enforcement_action/mining-max-llc/"},{"credibility":1,"name":"Desist and Refrain Order — California Department of Business Oversight (PDF)","type":"regulatory","url":"https://dfpi.ca.gov/wp-content/uploads/sites/337/2020/07/D-R-Mining-Max-LLC.pdf"}]},{"content":"Mining Max LLC maintained business registrations in both California and Nevada. The company listed a Los Angeles, California address and a Las Vegas, Nevada address in its public-facing materials. The Nevada registration was reportedly in default status at the time of the December 2017 reporting. The California registration was dated May 30, 2017, according to regulatory records. No US federal criminal charges against Mining Max or its principals have been identified in publicly available DOJ or FBI records as of the date of this investigation.","heading":"US Business Registrations and Legal Status","severity":"medium","sources":[{"credibility":2,"name":"Prosecutors File Charges in Alleged $250 Million Crypto Mining Fraud — CoinDesk","type":"news_article","url":"https://www.coindesk.com/markets/2017/12/21/prosecutors-file-charges-in-alleged-250-million-crypto-mining-fraud"},{"credibility":1,"name":"Mining Max LLC Enforcement Action — California DFPI","type":"regulatory","url":"https://dfpi.ca.gov/enforcement_action/mining-max-llc/"}]},{"content":"According to a report by CoinTelegraph, a South Korean court sentenced at least one participant in the Mining Max scheme to two years and six months in prison. The sentencing involved an unnamed 43-year-old man described as a participant in the scheme. The report did not identify whether this individual was among the 21 indicted executives or a lower-level participant. No verifiable sources confirm the outcome of criminal proceedings against the principal operators, including the chairman and vice chairman who remained fugitives as of the December 2017 indictments.","heading":"Partial Sentencing by South Korean Courts","severity":"medium","sources":[{"credibility":2,"name":"Crypto Scammer Sentenced by South Korean Authorities — CoinTelegraph (URL no longer resolves; referenced in search results)","type":"news_article","url":"https://cointelegraph.com/news/crypto-scammer-sentenced-by-south-korean-authorities"}]},{"content":"MiningMax's scheme collapsed when mining operations failed to generate sufficient returns to meet the promised daily payouts owed to lower-tier investors. Once investor complaints accumulated and the scheme's inability to sustain payments became apparent, the company's senior leadership went into hiding. Approximately $110 million is alleged to have been transferred to offshore accounts before the collapse. The scheme is frequently cited in academic and industry literature as an example of a cryptocurrency mining Ponzi/pyramid hybrid and is included in analyses of crypto fraud in South Korea.","heading":"Scheme Collapse and Aftermath","severity":"high","sources":[{"credibility":3,"name":"MiningMax Ponzi Scheme — QuadrigaInitiative Case Study","type":"research","url":"https://quadrigainitiative.com/casestudy/miningmaxponzischeme.php"},{"credibility":3,"name":"Mining Max Pyramid Scheme Comes Crashing Down — Bitcoinist","type":"news_article","url":"https://bitcoinist.com/mining-max-pyramid-scheme-comes-crashing-down/"},{"credibility":2,"name":"Cryptocurrency Ponzi Schemes and Their Modus Operandi in South Korea — Springer/Security Journal","type":"research","url":"https://link.springer.com/article/10.1057/s41284-024-00417-5"}]}],"sources_used":[{"credibility":2,"name":"Prosecutors File Charges in Alleged $250 Million Crypto Mining Fraud — CoinDesk","type":"news_article","url":"https://www.coindesk.com/markets/2017/12/21/prosecutors-file-charges-in-alleged-250-million-crypto-mining-fraud"},{"credibility":2,"name":"Prosecutors Bust Multimillion Dollar Cryptocurrency Scam — The Korea Herald","type":"news_article","url":"https://www.koreaherald.com/article/1536590"},{"credibility":2,"name":"Multimillion Dollar Cryptocurrency Scam By Mining Max Busted In South Korea — IBTimes","type":"news_article","url":"https://www.ibtimes.com/multimillion-dollar-cryptocurrency-scam-mining-max-busted-south-korea-2630744"},{"credibility":2,"name":"Cryptocurrency Pyramid Scheme Busted in South Korea — Finance Magnates","type":"news_article","url":"https://www.financemagnates.com/cryptocurrency/news/cryptocurrency-pyramid-scheme-busted-south-korea-250-million-stolen/"},{"credibility":2,"name":"Cryptocurrency Pyramid Scheme By Mining Max Busted In South Korea — BlockTribune","type":"news_article","url":"https://blocktribune.com/cryptocurrency-pyramid-scheme-mining-max-busted-south-korea/"},{"credibility":2,"name":"$250 Million Ethereum Mining Scam? Korean Prosecutors File Charges — CCN","type":"news_article","url":"https://www.ccn.com/250-million-ethereum-mining-scam-korean-prosecutors-file-charges/"},{"credibility":1,"name":"Mining Max LLC Enforcement Action — California DFPI","type":"regulatory","url":"https://dfpi.ca.gov/enforcement_action/mining-max-llc/"},{"credibility":1,"name":"Desist and Refrain Order against Mining Max LLC — California Department of Business Oversight (PDF)","type":"regulatory","url":"https://dfpi.ca.gov/wp-content/uploads/sites/337/2020/07/D-R-Mining-Max-LLC.pdf"},{"credibility":3,"name":"Mining Max $250 Million Ponzi Scheme Shut Down, Arrests in Korea — BehindMLM","type":"news_article","url":"https://behindmlm.com/companies/mining-max-250-million-ponzi-scheme-shut-down-arrests-in-korea/"},{"credibility":3,"name":"MiningMax Ponzi Scheme Case Study — QuadrigaInitiative","type":"research","url":"https://quadrigainitiative.com/casestudy/miningmaxponzischeme.php"},{"credibility":3,"name":"Mining Max Pyramid Scheme Comes Crashing Down — Bitcoinist","type":"news_article","url":"https://bitcoinist.com/mining-max-pyramid-scheme-comes-crashing-down/"},{"credibility":2,"name":"Cryptocurrency Ponzi Schemes and Their Modus Operandi in South Korea — Security Journal (Springer Nature)","type":"research","url":"https://link.springer.com/article/10.1057/s41284-024-00417-5"}],"summary":"MiningMax (also styled Mining Max LLC) was a US-registered cryptocurrency mining company that operated from approximately September 2016 through October 2017, allegedly defrauding approximately 18,000 investors across 54 countries out of roughly 270 billion Korean won (approximately $250 million USD). South Korean prosecutors indicted 21 individuals in December 2017 on charges of fraud and violations of Korea's door-to-door sales law; the company's chairman, Nam Ho Park (also known as Daniel Park), and vice chairman fled the country and were placed on Interpol's wanted list. The California Department of Financial Protection and Innovation (DFPI) issued a Desist and Refrain Order against Mining Max LLC and its founder Nam Ho Park in July 2020.","timeline":[{"date":"2016-09-01","event":"MiningMax begins soliciting investors for Ethereum cloud mining, promising guaranteed daily returns. Minimum investment set at $3,200 per mining rig.","source":"CoinDesk / Korea Herald","source_url":"https://www.coindesk.com/markets/2017/12/21/prosecutors-file-charges-in-alleged-250-million-crypto-mining-fraud"},{"date":"2017-05-30","event":"Mining Max LLC is registered in California, according to DFPI records.","source":"California DFPI Enforcement Page","source_url":"https://dfpi.ca.gov/enforcement_action/mining-max-llc/"},{"date":"2017-10-01","event":"MiningMax ceases paying investors as mining returns fail to cover promised yields. Senior leadership reportedly goes into hiding.","source":"BehindMLM / Korea Herald","source_url":"https://behindmlm.com/companies/mining-max-250-million-ponzi-scheme-shut-down-arrests-in-korea/"},{"date":"2017-12-01","event":"South Korean police arrest more than 14 MiningMax executives and employees on charges including economic crime and fraud.","source":"IBTimes / Finance Magnates","source_url":"https://www.ibtimes.com/multimillion-dollar-cryptocurrency-scam-mining-max-busted-south-korea-2630744"},{"date":"2017-12-20","event":"Incheon District Prosecutors' Office announces indictment of 21 suspects on charges of fraud and violation of South Korea's door-to-door sales law. Three others indicted without detention on embezzlement charges, including singer Park Jung-woon. Seven individuals, including chairman Nam Ho Park (Daniel Park) and vice chairman, placed on Interpol's wanted list.","source":"Korea Herald / CoinDesk","source_url":"https://www.koreaherald.com/article/1536590"},{"date":"2020-07-07","event":"California Department of Business Oversight (now DFPI) issues Desist and Refrain Order against Mining Max LLC and its founder Nam Ho Park for selling unregistered securities and operating an investment scheme without proper registration.","source":"California DFPI","source_url":"https://dfpi.ca.gov/enforcement_action/mining-max-llc/"}]},"v":1}