South Koreans Lost $2.28 Billion to Crypto Frauds Since 2017

The figure does not include the losses due to exchange hacks.

South Koreans have lost 2.69 trillion won (about $2.28 billion) in crypto-related crimes since July 2017, according to an estimation by the country’s Justice Ministry.

Despite the massive figure, the government data only considered crimes including crypto frauds, Ponzi schemes, embezzlements, and illegal exchange transaction, while it did not add millions stolen from the crypto exchanges in the country.

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The report also detailed that the South Korean authorities indicted and detained 132 crypto-related criminals and fraudsters while another 288 individuals were indicted without physical detention between July 2017 and June 2019.

A lucrative market for crypto criminals

South Korea is one of the biggest markets for cryptocurrency trading despite its small population. Though the country banned initial coin offerings (ICOs) in 2017, the trading market in the country is still thriving.

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The government is now focusing on tackling the increasing criminal activities as last month Justice Minister Park Sang-ki ordered stern measures against cryptocurrency criminals, asking the prosecution to claw back the gains from such crimes, per The Korea Herald.

Many South Korean exchanges also became targets of hackers with the crypto boom. Bithumb, one of the largest digital asset exchange in the country, was hacked twice since 2018 and lost $30 million and $19 million respectively. Another exchange, Coinrail, also lost around $40 million last years to hackers.

In an attempt to regulate the sector and prevent criminal activities, the South Korean government also banned the operations of anonymous crypto exchanges last year in January. However, many small exchanges are using the so-called “beehive accounts” to circumvent the regulations.

In June, Finance Magnates reported that a mobile-specific crypto mining malware is targeting Android devices and South Korean users are most affected with it.

Meanwhile, Binance, one of the largest crypto exchanges in terms of trade volume, is eying to enter the South Korean market; however, its the plans for the country are not clear yet.

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