Sunken Treasure Gold—Or Cryptocurrency? South Korean Critics Caution Against Investing in Lifting Fabled Wreck

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Divers off the South Korean island of Ulleungdo said they have discovered the fabled wreck of the Dmitrii Donskoi, a Russian warship that was sunk in 1905 and is rumored to contain 5,500 boxes of gold bars and coins said to be worth $133 billion. Shinil Group

Doubt has been cast on claims that a Russian warship sunk 113 years ago contains more than $130 billion in treasure. At the same time, a cryptocurrency launched on the back of the claim seems to have dubious credibility.

The Korean-based company Shinil Group said its submersibles recently discovered the wreck of the armed cruiser the Dmitrii Donskoi, which was sunk in 1905 during the Russo-Japanese War.

Shinil spokesman Park Seong-jin told Reuters: "We believe there are gold boxes and it's historically proven. The boxes were very tightly lashed, indicating there are really precious stuff inside."

Shinil said that the treasury of the entire Russian flotilla may have been on board, comprising 5,500 boxes of gold bars and coins, and it released video and photos of the vessel.

But the Korean Institute of Ocean Science and Technology (KIOST) said it found the Dmitrii Donskoi in 2003, and its website displayed photos from 2007 of what it said was the vessel.

"It's preposterous for the Shinil Group to claim ownership as if they'd been the first to find it," an official at KIOST said, according to Korean news service Hani.

The company Dong-Ah Construction also claimed to have discovered the vessel, in 2000, and was accused of spreading false rumors to increase its stock prices. It later went bankrupt.

A website under operating under the Shinil Group's name said that it had launched a Donskoi International cryptocurrency linked to the treasure haul and that it would "share profits" by giving the virtual currency to anyone signing up to the exchange.

However, the Shinil spokesman told Reuters that the website was not affiliated with the group.

Shinil is not listed, but its president has shares in local company Jeil Steel, whose stock rose 30 percent on Wednesday. South Korea's Financial Supervisory Service told The Guardian it was looking closely at trade involving Jeil Steel, in particular at whether investors are being misled.

"Investors should beware because it's uncertain whether the ship is salvageable and whether Shinil would be able to gain ownership of the assets even if it gets permission to raise it," said the official, who did not want to be identified.

"Dong-Ah Construction made similar claims over the same ship but failed to deliver on its promises and went bankrupt, causing huge losses for investors," the official added.

Experts have also questioned whether 200 tons of gold—double the current gold reserves at South Korea's central bank—would be put on a single ship that already would have carried 1,600 tons of coal, The Guardian reported.

If its estimated $133 billion haul is true, it would dwarf the next most valuable haul found on the seabed. That was the San Jose which was sunk in 1708 and had treasure estimated at between $1 billion and $17 billion.

It is uncertain whether Shinil would even be able to get permission to carry out the salvage of the wreck, with local laws demanding that the company deposit 10 percent of the estimated value before starting its operation. This would be $13.2 billion.

Shinil said it will file a request for the right to salvage later this week. It would lobby to make a deposit based on the value of the shipwreck, not the treasure on board, which it said would be worth closer to $1 million.

KIOST did not immediately reply to request for comment.