South Korean Crypto Exchanges Block Millions in Romance Scam Transactions

South Korean Crypto Exchanges Block Millions in Romance Scam Transactions

South Korean crypto exchanges reported blocking over $82 million worth of transactions linked to romance scams in the past year. Coinone, one of the leading exchanges in South Korea, stated that catfishing and other romantic scams utilizing cryptocurrency have become widespread in the country. It further revealed that it had successfully halted more than $2.6 million worth of romance scam-related trades. Coinone attributed its success to the utilization of an “abnormal transaction detection system” and round-the-clock monitoring network to protect its customers. This announcement comes shortly after a warning from the Financial Supervisory Service (FSS), which highlighted the rise in crypto-related scams on social media platforms and cautioned the public about romance scammers. The FSS also warned of the dangers associated with unsolicited investment recommendations and advice.

According to the FSS, romance scammers often have affiliations with illegal or bogus crypto exchanges. Coinone shared an incident where a male customer in his 60s fell victim to a romance scam group, nearly losing all of his cryptocurrency holdings. The customer intended to send his coins to a private wallet seemingly owned by the female proprietor of a hair salon in Japan. Coinone’s staff discovered that the customer had recently installed a Japanese chat app and a Japanese-Korean translation app on his mobile phone. Additionally, the name on the wallet differed from the information the customer had entered in his transaction request. Coinone promptly contacted the customer for further details and learned that his newfound “friend” had requested the transfer of Bitcoin to a crypto exchange before supposedly visiting him in South Korea. This “exchange” turned out to be fraudulent, prompting Coinone to inform the customer that he was likely targeted in a romance scam.

To combat these deceptive activities, other South Korean exchanges have implemented round-the-clock transaction monitoring to identify and block suspicious withdrawal requests. They are also actively building databases of suspected scam crypto exchanges and working closely with regulatory bodies to identify and report fraudulent trading platforms. The FSS warning highlighted a common tactic employed by scammers, posing as tax officials or securities providers who demand payment in cryptocurrency. These criminals resort to dire warnings, threatening to freeze bank accounts and crypto wallets if victims fail to send money or coins. Furthermore, organized groups of East Asian crypto scammers have recently turned to dating apps as potential hunting grounds for targets. In 2022, Japanese authorities issued a warning about an alarming surge in scam incidents linked to international dating sites.

In response to the escalating number of romance scams, South Korean police have urged the public to remain cautious and avoid individuals on dating sites persuading them to invest in online crypto mining projects. They have highlighted the case of a South Korean woman who drugged and robbed a man she met online, stealing tokens worth $87,000, after learning that he was a crypto investor. This incident serves as a reminder of the real-life consequences and financial losses associated with falling victim to romance scams.

South Korean crypto exchanges are actively working to prevent romance scams and protect their customers from falling victim to fraudulent activities. Through the implementation of advanced monitoring systems and collaboration with regulatory authorities, these exchanges are making significant progress in identifying and blocking suspicious transactions. However, it is crucial for individuals to exercise caution when engaging in online relationships and to be wary of requests for cryptocurrency transfers. Public awareness and education are paramount in combating the ever-evolving tactics employed by scammers in the crypto space.

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