n a bold move to protect their customers, South Korean crypto exchanges have successfully blocked a staggering $82 million worth of romance scam transactions in 2023. The rise of catfishing and other romantic scams utilizing cryptocurrencies has become a rampant issue in South Korea, prompting these exchanges to take action.
Through the implementation of advanced transaction detection systems and round-the-clock monitoring, they have managed to safeguard their users and prevent significant financial losses.
The Prevalence of Romance Scams in South Korea
Romance scams, also known as catfishing, have become a major concern in South Korea. These scams involve individuals using false identities to establish online relationships with unsuspecting victims, often leading to financial exploitation. The use of cryptocurrencies has provided scammers with a new avenue to carry out their deceitful activities, making it crucial for crypto exchanges to step up their game.
Coinone, one of South Korea's leading crypto exchanges, has been at the forefront of the fight against romance scams. The exchange reported that it stopped over $2.6 million worth of romance scam-linked trades in 2023 alone. Coinone attributes its success to the implementation of an abnormal transaction detection system and a vigilant 24-hour monitoring network.
Collaboration with Financial Supervisory Service (FSS)
The Financial Supervisory Service (FSS) in South Korea has issued a warning regarding the rise of crypto-related scams on social media platforms. The FSS has urged the public to be cautious of romance scammers and to avoid unsolicited investment-related recommendations and advice. Exchanges like Coinone have been working closely with the FSS to stay ahead of scammers and protect their users.
Coinone shared a real-life example of how their detection system worked in identifying a romance scam. A male customer in his 60s was deceived by a romance scam group and almost lost all of his crypto holdings. Coinone's staff detected that the man had installed a Japanese chat app and a Japanese-Korean translation app on his mobile phone. They also noticed discrepancies between the name on the wallet and the transaction request. Through careful investigation and communication with the customer, Coinone was able to expose the scam and prevent further losses.
Round-the-clock transaction Monitoring and Database Building
To enhance their efforts in combating romance scams, South Korean exchanges have implemented round-the-clock transaction monitoring. This allows them to block suspicious withdrawal requests and identify potential scam exchanges. They are also working with regulators to report and shut down bogus trading platforms that facilitate these scams.
Romance scammers in South Korea have adopted various tactics, including posing as tax officials and securities providers. They manipulate victims by warning them of frozen bank accounts and crypto wallets unless they comply with their demands. Additionally, organized groups of scammers are turning to dating apps to find potential targets. Individuals must exercise caution and be skeptical of investment requests from strangers, especially those involving cryptocurrencies.
