Upbit Refunds $6.07M to Scam Victims, Reinforces Fight Against Crypto Fraud

South Korea Upbit Exchange has reimbursed $6.07 million to 380 voice phishing victims, showcasing its advanced Fraud Detection System and collaboration with law enforcement to combat crypto scams.

Upbit Proactive Efforts Combat Crypto Scams

South Korean cryptocurrency exchange Upbit has refunded 8.5 billion won ($6.07 million) to 380 victims of voice phishing scams. This development, achieved in partnership with the Seoul Metropolitan Police Agency, highlights the effectiveness of Upbit’s Fraud Detection System (FDS).

The refunds mark a significant milestone in Upbit’s mission to safeguard its users against scams. Earlier in 2023, the exchange returned 5 billion won to 246 victims in February and an additional 3.5 billion won to 134 victims in November.

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

Lessons from the Lazarus Group Hack

Upbit’s vigilance stems from lessons learned during the infamous Lazarus Group hack in 2019, where North Korean hackers stole 342,000 ETH (valued at 1.4 trillion won at the time). The stolen Ethereum was laundered across 51 exchanges in 13 countries, with only 4.8 Bitcoin ultimately recovered.

This incident prompted Upbit to invest heavily in fraud prevention technologies and collaborate closely with law enforcement to identify and support victims.

Regulatory Scrutiny on Partnerships

Upbit’s relationship with K Bank, its exclusive fiat banking partner, has also drawn regulatory scrutiny. Concerns about K Bank’s dependency on Upbit surfaced after 17% of its deposits were found to be tied to the exchange.

K Bank recently withdrew its IPO application due to low demand and mounting concerns over its reliance on the volatile cryptocurrency sector. Regulators, including the Financial Supervisory Service (FSS), have questioned whether K Bank adequately disclosed these risks to investors.

Lee Kang-il, a prominent lawmaker, criticized the situation as “abnormal” and doubted K Bank’s ability to operate independently without Upbit.

Upbit’s Commitment to Security

Upbit’s ongoing efforts to reimburse scam victims, improve fraud detection, and address regulatory challenges reflect its commitment to user safety. The exchange’s collaboration with law enforcement and investment in cutting-edge technologies underline its proactive approach to combating fraud in the rapidly evolving cryptocurrency space.

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