South Korea’s cryptocurrency exchange Upbit has refunded 380 victims of voice phishing scams a total of 8.5 billion won ($6.07 million). This milestone highlights the effectiveness of the exchange’s collaboration with law enforcement to mitigate investor losses.
According to Ajunews, the refunds made on November 22 were enabled by Upbit’s real-time Fraud Detection System (FDS) and a partnership with the Seoul Metropolitan Police Agency. This success comes after Dunamu, Upbit’s operator, worked closely with police to identify victims who were unaware of or had not reported their losses following the scams. It marks a significant step in Upbit’s ongoing efforts to protect its users and return stolen funds to victims of a 2019 attack.
A spokesperson for the exchange stated, “Thanks to the Seoul Metropolitan Police’s investigation and Upbit’s FDS monitoring, we continue to protect our users as crypto activities grow.”
Earlier this year, Upbit refunded 5 billion won to 246 victims of similar fraud schemes in February. In November, an additional 3.5 billion won ($2.7 million) was returned to 134 individuals. These proactive measures demonstrate Upbit’s commitment to combating crypto fraud and underscore the importance of leveraging advanced technology and partnerships with law enforcement to ensure investor safety.
A Wake-Up Call for Upbit
Upbit’s efforts to combat crypto scams are part of a broader initiative to address escalating threats within the cryptocurrency sector. Among the most significant challenges faced by the exchange was the hack orchestrated by North Korea-linked Lazarus and Andariel groups. During the attack, hackers stole 342,000 ETH worth 1.4 trillion won.
Investigations revealed that the stolen Ethereum was laundered through 51 exchanges across 13 countries, including the U.S. and China. Authorities found that 57% of the stolen ETH was converted to Bitcoin at a 2.5% discount, primarily through platforms controlled by North Korea. Despite significant recovery efforts, only 4.8 Bitcoin were retrieved and returned to Upbit from a Swiss exchange.
Meanwhile, South Korean regulators are closely examining the partnership between Upbit and K Bank, the country’s largest crypto exchange and its exclusive fiat banking service provider. K Bank recently withdrew its IPO application due to low demand and growing concerns about its heavy reliance on Upbit. Reports indicate that 17% of K Bank’s deposits are tied to Upbit, raising fears about the bank’s financial stability in the event of a downturn in the crypto market.
Regulators, including lawmakers and the Financial Supervisory Service (FSS), have questioned whether K Bank adequately disclosed the risks of its dependence on Upbit to potential investors. Lee Kang-il, a prominent lawmaker, described the situation as “abnormal” and expressed doubts about the bank’s ability to operate independently without Upbit.
