[Coins Used in Crime] ② "Intelligent and Advanced Methods Are Inevitable... Prevention Is the Best"

Interview with Jang Seok-won, Former Police Officer and Head of Coinone User Protection Center
Prevented 23 Crimes Worth Approximately 527 Million Won Since the Beginning of the Year

"There is no such thing as 100% recovery of damages after a crime occurs. I believe the best approach is to prevent customers from falling victim to virtual asset-related crimes in advance."

Jang Seok-won, head of the Coinone User Protection Center, joined the domestic virtual asset exchange Coinone last year after serving as a police officer for 23 years. He acts as a watchdog to ensure that Coinone customers engaging in virtual asset transactions are not exposed to potential crimes. The Coinone User Protection Center was established in February last year. It handles ▲unusual transactions ▲client hacking ▲financial incidents, among others. It also manages responses to investigative agencies, public institution responses such as debt collection seizures and releases, and customer complaints, covering both internal and external user protection tasks. Additionally, it is working on the advancement and improvement of systems that detect unusual transactions.

As the head of the User Protection Center, Jang strives to differentiate the center’s efforts in preventing customer damages. When unusual transactions are detected, he contacts customers directly to explain and alert them to the possibility of crime. Results are already showing. From early this year until now, a total of 23 virtual asset crimes have been prevented in advance through unusual transaction detection monitoring and preemptive measures, with damage prevention amounting to approximately 527 million KRW.

During his time as a police officer, he experienced several cases where victims of voice phishing crimes were saved with police assistance. Jang said, "I once saw an elderly woman putting cash into an automated teller machine and asked why. She replied that she had received a call saying her daughter had an accident. I stopped the deposit to prevent a voice phishing crime."

Recently, virtual asset-related crimes have been reported to include various types such as voice phishing and romance scams. Romance scams are a combination of romance and scam, referring to approaching someone on social networking services (SNS) as if interested, then stealing their assets. However, Jang noted that these crimes are now combining and evolving. He explained, "In the past, these were separate crimes, but now they are combined, and psychological attacks are becoming more sophisticated, ultimately leading to victims being 'holy' [completely deceived]. Since it is very difficult to recover virtual assets once transferred to criminals, we notify customers when unusual transaction signals are detected and take measures such as withdrawal restrictions."

He recalled that preventing a romance scam attempt while working as the User Protection Center head was particularly memorable. He said, "To transfer virtual assets to another exchange or wallet, the wallet address to be transferred must be registered, and at this time, a verification process is conducted by receiving videos or screenshots containing personal identification information. During the verification of a video submitted by a male customer in his 60s, we found messenger apps like Telegram, remote control applications, and translation apps installed, which seemed suspicious. We prevented a romance scam attempt worth about 5 million KRW." The customer mentioned during a call with the User Protection Center staff that he intended to invest in mining through a Japanese friend who runs a beauty salon, and the registered wallet address alias was under another person's name, raising suspicions of criminal involvement. Virtual asset withdrawals were restricted, precautions were advised, and the customer also filed a report with a financial company.

He urged that to prevent virtual asset-related crimes, people should familiarize themselves with various guidelines and always remain suspicious. He added that many victims fall for requests to install smartphone apps from unknown sources or impersonations of the police, prosecution, or Financial Supervisory Service, so one should always be cautious first. Since malicious apps may be installed, if there is suspicion of crime, he advised contacting investigative agencies or the Coinone Customer Center from another smartphone. He also recommended watching investment caution educational videos provided by each exchange and the Digital Asset Exchange Association (DAXA) to invest safely.

Finally, Jang predicted that once the Virtual Asset User Protection Act, passed by the National Assembly plenary session, is implemented, investors will be better protected than before. The new legislation prioritizes applying the Capital Markets Act to virtual assets with securities characteristics. It also establishes grounds for imposing liability for damages and fines in cases of unfair trading of virtual assets and applies the law to unfair trading occurring abroad that affects the domestic market. Furthermore, it defines insider trading, market manipulation, and fraudulent trading as unfair acts, with penalties including imprisonment of one year or more or fines up to 500 million KRW.

Jang said, "It is encouraging that minimum safeguards for investor protection are being established," and added, "If the remaining virtual asset-related bills are discussed promptly, standards are set, and investor protection and industry promotion measures are balanced and discussed, the market will become more transparent and crime damages will decrease."

This content was produced with the assistance of AI translation services.