Crypto-related phishing attacks have become “common” in South Korea, a report has claimed, with a top financial regulator poised to take action.
Per Namdo Ilbo, the Financial Supervisory Service (FSS) will team up with the country’s largest crypto exchanges to create promotional materials. The regulator wants to boost public awareness of common crypto scams.
Crypto Phishing Attacks ‘Rampant’ – FSS Prepares Response
On 29 April, the FSS announced plans to publish a “case book” of case studies and “tips”. The regular said he hopes it will help citizens identify and avoid crypto-related fraud.
The FSS said the casebook contained an analysis of 2,209 reports of crypto-related phishing attacks recorded from January to April.
The regulator said the reports were processed by the country’s virtual asset-related investment fraud reporting centre.
The data shows that chat app-based crypto “reading rooms” have become a hotbed of crypto-phishing schemes.
Almost 27 of all the 2,209 reports originated from these open channels, which were ostensibly set up as knowledge-sharing resources for South Korean crypto-enthusiasts.
The police have shut down several rings operating “reading room” type scams in recent years.
Fake exchanges target South Korean crypto enthusiasts
Some 19% of the cases, meanwhile, were related to “unregistered” or fake crypto exchanges.
The regulator explained that it had identified seven overarching themes in the most recent phishing report, namely:
Inducing victims to send coins to bogus crypto exchanges Romance scams, in which captive victims are encouraged to “invest in crypto projects together” Fake token locks NFT-related fraud Scams in which fraudsters impersonate crypto exchange employees Scams in which fraudsters from above -sellers pretend to be five. cryptoassets like Bitcoin (BTC) scams that originatefrom
South Korea is at the heart of the global cryptocurrency resurgence, and one exchange dominates the local market https://t.co/CS4c7Z9moU
— Bloomberg Crypto (@crypto) April 30, 2024
Case studies show devastating consequences
The regulator’s case studies include the story of a citizen who received an Instagram direct message from an individual claiming to be a pilot in the United States.
After developing a “romantic relationship,” the “pilot” said they earned a significant amount of money investing in crypto.
The “pilot” would regularly send the victim photos of luxury goods believed to have been purchased with these crypto trading profits.
The victim then agreed to “invest” a small amount of money, making a modest “profit”.
Then the victim agreed to take out a bank loan worth about $217,000. They then used this money to buy crypto assets.
The “pilot” instructed the victim to send the coins to a “crypto exchange”, which turned out to be fake.
When the victim tried to “withdraw” the coins from the “exchange”, they realized that they had been tricked.
The FSS said it would publish the casebook on its website and also provide printouts to “the financially vulnerable” at senior welfare centres.
The regulator said groups “such as the elderly” were particularly at risk. Government bodies have issued similar warnings in Japan.
FSS spokespeople said they would also distribute the casebook at employment support centers and metropolitan local government centers “across the country”. An official said:
“If you suspect that you have become the victim of an investment fraud similar to the case listed in the casebook, please report it to the FSS immediately. Alternatively, please contact the police and ask for assistance.”
The media outlet noted that the FSS is working with the Digital Asset Exchange Association (DAXA) on the project.
DAXA consists of the exchanges Upbit, Bithumb, Coinone, Korbit and Gopax, all of which have permits to offer KRW trading in South Korea.
And DAXA said it plans to post the casebook and educational videos on phishing protection on its members’ social media channels.
Late last year, the body said it would work with financial regulators to track down “undeclared crypto operators”.
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