South Korea’s Upbit Exchange Disburses 8.5 Billion Won to Hack Victims

crypto scam South Korea Upbit

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Jimmy Aki

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Jimmy Aki

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Jimmy has nearly 10 years of experience as a journalist and writer in the blockchain industry. He has worked with well-known publications such as Bitcoin Magazine, CCN, and Blockonomi, covering news...

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November 22, 2024

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South Korea’s cryptocurrency exchange, Upbit, has refunded 8.5 billion won ($6.07 million) to 380 victims of voice phishing scams, highlighting the success of collaboration between the exchange and law enforcement to reduce losses for investors.

Upbit Leads the Fight Against Crypto Scams

According to Ajunews, on November 22, the recovery was made possible through the real-time Fraud Detection System (FDS) and partnership with the Seoul Metropolitan Police Agency. This latest development comes after Upbit’s operator, Dunamu, has been working with the police to identify victims who were unaware or didn’t report their losses after the hack.

This has marked a significant milestone in Upbit’s ongoing efforts to protect its users and return stolen funds to victims of the hack perpetrated in 2019.

A spokesperson for the exchange noted, “Thanks to the Seoul Metropolitan Police’s investigation and Upbit’s FDS monitoring, we continue to safeguard our users as crypto activity grows.”

Earlier this year, Upbit returned 5 billion won to 246 victims of similar scams in February. In November, an additional 3.5 billion won ($2.7 million) was refunded to 134 individuals.

Upbit’s proactive measures demonstrate its commitment to combating crypto scams and highlight the importance of leveraging advanced technology and law enforcement partnerships to ensure investor safety.

Lazarus Group Hack Was A Wake-Up Call for Upbit Exchange

Upbit’s efforts to combat crypto scams are part of a broader initiative to address the growing threats within the cryptocurrency industry.

The Lazarus Group hack remains one of the most significant challenges the exchange has faced. During the attack, hackers affiliated with North Korea’s Lazarus and Andariel groups stole 342,000 ETH, valued at 1.4 trillion won.

Investigations revealed that the stolen Ethereum was laundered across 51 exchanges in 13 countries, including the United States and China.

Authorities found that 57% of the stolen ETH was converted into Bitcoin at a discount of 2.5%, often using North Korean-controlled platforms. Despite significant recovery efforts, only 4.8 Bitcoin was retrieved and returned to Upbit from a Swiss exchange.

Meanwhile, South Korean regulators are closely examining the partnership between K Bank and Upbit, the country’s largest cryptocurrency exchange. K Bank, which provides exclusive fiat banking services for Upbit, recently withdrew its IPO application due to low demand and growing concerns over its heavy reliance on the exchange.

Reports revealed that 17% of K Bank’s deposits were tied to Upbit, raising fears about the bank’s financial stability in the event of a downturn in crypto markets.

Lawmakers and regulatory bodies, including the Financial Supervisory Service (FSS), have questioned whether K Bank adequately disclosed the risks of its dependency on Upbit to potential investors. Lee Kang-il, a prominent lawmaker, criticized the situation as “abnormal” and doubted the bank’s ability to operate independently without Upbit.

The scrutiny highlights the challenges traditional financial institutions face when navigating partnerships in the volatile cryptocurrency sector.