While South Korea’s fever for cryptocurrency trading has fallen off, frauds and crimes associated with cryptocurrency exchanges have become more and more frequent.
According to the report from the Koran Herald, South Korea’s financial damage caused by cryptocurrency-related crimes is within the region of 2.7 trillion while a whooping figure of $2.3 Billion won in damage over the past two years. The news outlet claimed that South Korean government data showed this on Sunday, 21 July, 2019 .
Quoting a data from the Justice ministry, the news outlet averred that the total estimate of scams and fraud involving cryptocurrencies came to the neighbourhood of 2.69 trillion between July 2017 and June 2019. The news also stated that 132 cryptocurrency-related fraudsters and criminals have been indicted and detained while another 288 was only indicted without any form of physical detention over the stipulated period.
Although, hanker for trading digital currency has declined among the nationals, the number of cryptocurrency exchanges continued to be on the rising scope. And as time elapses, these exchanges have become more vulnerable to cyber attacks and fraud which has led to the accumulation of loss to such a surprising figure.
One of such exchanges that has been reported to have been attacked is Bithumb, South Korea’s biggest cryptocurrency exchange. In June of last year, the exchange lost 35 billion worth of cryptocurrencies in a hacking attack and also, in May of this year, it lost 3 million EOS from its hot wallet in another hacking attempt.
According to the report, in January last year, South Korea began a real-name trading system for cryptocurrencies, proscribing the use of anonymous bank accounts in transactions to prevent virtual coins being used for money laundering and other illegal activities. The government then put forward a guideline which would end the use of opaque accounts but the court ruled it out stating that it’s inappropriate for the government to order cryptocurrency exchanges to shut down their corporate accounts. The government had wanted to stop the use of opaque accounts because it allows the exchanges to manage investors’ money with their corporate bank accounts and thus it allows investors to buy or sell cryptocurrencies by circumventing the real-name trading system.
Following the cryptocurrency-related attacks and scams, Justice Minister, Park Sang-ki, ordered for stern measures to be adopted against cryptocurrency criminals, hinting that the prosecution should claw back the gains from such crimes. And also, Rep. Je Youn-kyung of the Democratic Party put forward a bill to tighten online security rules for all cryptocurrency exchanges. However, the report noted that bill is pending in the National Assembly.