A major South Korean exchange, Upbit, has paid six people for reporting fraudulent crypto-related schemes. Ten cases were reported to the exchange and six of them were selected. Upbit also recently partnered with Thomson Reuters to operate a system to support transparent crypto transactions.
Upbit Paid Users for Reporting Fraud
One of South Korea’s largest cryptocurrency exchanges, the Kakao Corp-backed Upbit, has paid six individuals for reporting fraudulent crypto-related schemes.
The exchange implemented a bounty system in March to reward users for identifying fraudulent schemes related to cryptocurrencies. The system is focused on identifying multi-level, illegal scams posing as cryptocurrencies or initial coin offering (ICO) tokens. “To the original complainant, Upbit pays a reward of 1 million won [~USD$931],” the exchange’s operator Dunamu Inc announced at the time.
Upbit said last week:
Since the implementation of the system, a total of 10 cases have been received and 6 of them have been selected. On June 6, we sent a reward of KRW 1 million with appreciation to the applicants.
Lee Seok-woo, the representative of Dunamu Inc (middle), and four out of the six winners.
“We provide reward money to users who have reported fraudulent acts that impersonate [an] ICO to the investigating agency (police, prosecutors) and submit the necessary evidence documents to prove the declaration,” the exchange clarified. While Upbit indicated that proper reporting procedures were not followed “such as the lack of evidence of investigation agency reports,” it decided to pay out regardless, to reward users for participating in the system and “to create a sound cryptocurrency ecosystem.”
The Kakao Corp-backed Upbit used to command the number one spot in the South Korean market in terms of overall trading volume. However, at the time of this writing, Upbit is the world’s eighth largest crypto exchange with a 24-hour trading volume of $201,594,215, according to Coinmaketcap. It is the second largest exchange in South Korea, after allowing Bithumb to retake the number one spot with $239,054,683 of trading volume over the same time period. Last month, news.Bitcoin.com wrote about the Korean authorities launching an investigation into Upbit.
World-Check in Partnership with Thomson Reuters
In addition to the aforementioned fraud notification system, Upbit has also recently created a system called World-Check. The system is part of a collaboration with Thomson Reuters, a multinational mass media and information firm.
The system is meant to support transparent cryptocurrency transactions and strengthen the company’s KYC (Know-Your-Customer) program. It aims to be “the trusted and accurate source of risk intelligence made available to help you meet your regulatory obligations, make informed decisions, and help prevent your business from inadvertently being used to launder the proceeds of crime or association with corrupt business practices,” the company described.
When a user joins Upbit, their membership information is checked against the World Check data. If the security risk is determined to be high in relation to crime and terrorism, the registration process is immediately terminated. The system also checks daily for criminal records of members against the World-Check database. The company believes that this will help prevent money laundering and terrorism financing activities using cryptocurrencies.
In an unrelated event, a small South Korean crypto exchange, Coinrail, claimed it was hacked over the weekend. The police are now investigating the case.
What do you think of Upbit paying users for reporting fraudulent crypto schemes? Let us know in the comments section below.
Images courtesy of Shutterstock and Upbit.
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