Crypto safety received a major boost in South Korea after the largest crypto exchange, https://upbit.co.kr/, announced reimbursements of 380 victims who had been defrauded through voice phishing in the amount of 8.5 billion won ($6.07 million). It shows how the exchange has stepped up efforts in cooperation with law enforcement agencies to combat cyber fraud.
These reimbursements were possible with the help of Upbit’s Fraud Detection System (FDS) and the MLM’s cooperation with the Seoul Metropolitan Police Agency. “As reported by Ajunews on November 22, Upbit’s operator Dunamu proactively sought out unsuspecting victims who did not report the losses to the police.
The Upbit spokesperson praised the success: “This success proves the efficiency of technology and cooperation.” “We will continue to protect users as the crypto market develops.”
Upbit has reimbursed victims of crypto scams on two occasions this year alone: 5 billion won to 246 victims in February, and 3.5 billion won to 134 individuals in November.
As for Upbit, exchanging cryptocurrencies as a countermeasure against fraud was induced by a large-scale phishing attack in September 2019, which stole 342,000 ethers, worth 1.4 trillion won at the time, made by Lazarus and Andariel, North Korean cyber groups.
South Korea’s Upbit Faces Scrutiny Over K Bank Reliance
The authorities also revealed that the stolen Ethereum was received and forwarded through 51 exchanges in 13 countries, including the US and China.
The researchers also found that 57% of the stolen ETH was traded on North Korean-controlled platforms at a lower price in exchange for Bitcoin. As for International recovery attempts, only 4.8 Bitcoin was pinched and repatriated from a Swiss exchange to Upbit.
The situation became the turning point for Upbit, making the exchange focus on security measures and cooperation with police.
Upbit has developed a good reputation for security measures. Still, its connection with K Bank, Upbi’s exclusive fiat banking partner, is on the South Korean government’s watchlist.
K Bank recently decided to suspend the IPO due to concerns that the cryptocurrency exchange constitutes 17% of deposits. Subsequently, opponents, such as legislators and the FSS, have asked whether K Bank sufficiently publicized the risks embedded in this reliance on consumers.
A prominent lawmaker, Lee Kang-il, called the situation ‘abnormal’ and questioned whether K Bank can exist without Upbit’s support.
Upbit’s processes to pay back scam victims can be seen as an approach to investor and regulatory safeguards, establishing the bar for similar exchanges. Nevertheless, pressure on its banking partners shows that, despite the recent acceleration of cryptocurrency adoption in various industries, achieving stability in developing the young sector remains a problem.
With the progress of the cryptocurrency market, the effectiveness of activities such as Upbit’s will necessarily affect lobby strategies and legislation trends.
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