Coinspeaker South Korea’s Upbit Returns Over $6 Million to 380 Victims of Telecom Fraud
South Korean cryptocurrency exchange Upbit has taken a commendable step by returning over $6 million (8 billion KRW) to 380 victims of telecom fraud. This initiative was part of a broader effort to combat illicit activities that often target digital assets trading platforms.
The recovered funds stemmed from fraudulent activities that exploited Upbit’s services, with perpetrators targeting users through schemes linked to telecom scams.
Upbit Makes Scam Victims Whole
Upbit on its website highlighted many ways in which users can fall victim to telecom fraud, creating awareness to protect users against malicious actors.
Those who had already fallen victim of these scams have been reimbursed. According to a November 22 report by Ajunews, the company sought the help of South Korean law enforcement and financial authorities including the Seoul Metropolitan Police facilitate the return of the funds.
Additionally, the exchange worked with Dunamu, another South Korean crypto firm to speed up the refund. According to Ajunews, Dunamu implemented its real-time abnormal transaction monitoring system (FDS) to freeze compromised funds.
Meanwhile, this is the second time Upbit is refunding scam victims this year. In February, the company returned approximately $5 million to 246 users who lost their funds to scammers.
Upbit Faces Regulatory Challenges
Despite its efforts to create a safer environment for its users by actively combating fraud, the company is not without issues. In 2019, Upbit suffered a major cybersecurity attack that resulted in the loss of 342,000 Ethereum ETH $3 345 24h volatility: 6.6% Market cap: $402.92 B Vol. 24h: $56.75 B worth approximately $50 million at the time. Currently, the stolen funds are worth more than $1.1 billion based on market prices.
On Thursday, Coinspeaker reported that South Korean authorities have finally identified the perpetrators to be the notorious North Korean hackers Lazarus Group in conjunction with Andariel, as the masterminds behind the theft.
The law enforcement worked together with the United States Federal Bureau of Investigation (FBI) to uncover the hackers.
Alongside its cybersecurity challenges, Upbit is under investigation for alleged lapses in adhering to know-your-customer (KYC) requirements. Reports indicate that the exchange failed to authenticate the identities of a significant number of accounts, sparking concerns about its compliance with anti-money laundering (AML) laws.
This scrutiny coincides with Upbit’s efforts to secure the renewal of its operating license, a vital credential for maintaining its dominance in South Korea’s competitive cryptocurrency market. If the alleged violations are proven, Upbit could face steep fines of up to 100 million won (approximately $71,740) per infraction, potentially leading to considerable financial repercussions.
Moreover, these regulatory concerns threaten to complicate the renewal process for the exchange’s license, which is essential for its continued operations.
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South Korea’s Upbit Returns Over $6 Million to 380 Victims of Telecom Fraud