Phishing Losses of 12.2 Billion Won Frozen in Cryptocurrency Exchanges... Police to Return Funds

The police are in the process of identifying approximately 12.2 billion KRW of phishing victim funds frozen in domestic cryptocurrency exchanges and returning them to the victims.

The Seoul Metropolitan Police Agency signed a business agreement (MOU) related to the refund of damages with the five major domestic exchanges (Upbit, Bithumb, Coinone, Korbit, Gopax) on the 21st. /Photo by Seoul Metropolitan Police Agency

On the 27th, the Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency announced that they had confirmed about 12.2 billion KRW of victim funds frozen in exchange accounts due to phishing crimes and identified 503 phishing victims. Since the beginning of this month, they have started the refund process with the exchanges, and as of the 22nd, the police have refunded 4 billion KRW to 100 victims.

While banks and other financial institutions can quickly refund victims because information about the accounts to which the victim funds were transferred and victim details are shared between banks upon damage reports, it was difficult to recover funds in the case of exchanges due to the lack of legal grounds. Even if the exchange was notified by the previous bank that criminal victim funds had been deposited into the exchange account and froze the account, they could not receive victim information from the bank and thus could not refund the victims.

From April, the police tracked funds across 2,543 financial accounts over four months and identified 503 victims. Additionally, they actively shared this information with the exchanges and began the victim recovery process earlier this month. On the 21st, they also signed a Memorandum of Understanding (MOU) related to victim fund refunds with the five major domestic exchanges (Upbit, Bithumb, Coinone, Korbit, and Gopax).

A police official stated, "Through this investigation, we supplemented the limitations of laws and systems by actively recovering large sums of victim funds that had been frozen in exchanges for years and finding their owners." He added, "Since institutional problems regarding phishing victim fund refunds were identified during the investigation, we will continuously consult with relevant authorities and exchanges to promptly address these issues."

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