South Korea’s Largest Exchange, UpBit Rewards $930 For Ponzi Schemes or Scams Report

$930 UpBit Reward for Scams

UpBit, the largest South Korean cryptocurrency exchange platform, recently launched a new reward system. This is a counter measure to battle the rising number of illegal scams and Ponzi schemes. Through a partnership with Bittrex, the platform lists over 120 coins and has a 24-hour trading volume of $1.1B.

$930 Reward for Vigilant Users

The aim is to create a “friendly cryptocurrency trade environment and to protect the exchange platform from fraud“. Consequently, they invite all its users to report any suspicious activities to UpBit and police agencies. The pilot phase of the system will run up to March 2019. Thereafter UpBit will decide if the program will continue running.

The UpBit Reward system encourages vigilance according to a report from Hankook Media.

“If illegal multi-level fraud eyewitnesses or victims report to UpBit and investigating agencies at the same time, a cash award will be given to the first reporter of the illegal recruitment case.”

UpBit is indeed offering a $930 reward to the first complainant. To report suspected criminal activities, UpBit advises one to select the Kakao Talk Consultation option on the UpBit app.

By March 23, UpBit had reported over 20 fraud related cases to the police after carrying out their own investigations. They even got a letter of appreciation from Suwon Chungbu Police Station after reporting an impersonator. Hankook Media confirms this reporting that,

“UpBit has been tracking illegal multi-level coin schemes with its own monitoring.”

Kakao Coin Frauds

There have also been increasing reports of fraudulent acts pretending to be Kakao Coin and issuing pre-sales of its coins.

Kakao came out to emphasize that the undergoing pre-sale of coins and recruitment of participants and investors for the platform are not true.

It further went ahead to issue a notice stating, “We are concerned about the damage caused by the fraudulent activity of the distributor”, clarifying that, “the company is preparing to establish a blockchain subsidiary.”

Regulatory Worries

This comes as the controversial UpBit receives criticism for not participating in the Korean Blockchain Association, meaning that it has no obligation to comply with the self-regulatory measures taken by other exchanges such as BitHumb and Korbit.

The exchange has not confirmed if it will be joining the association or not stating. Reporting to Newspim, they “are currently reviewing the self-regulation and there is no decision about joining the association”.

There are major concerns that if UpBit does not join the association there will be issues with equality among exchanges. Also other exchanges may withdraw from the association making self regulation pointless. UpBit has however is taking measures to comply with the mandates set by the government.

Despite all the challenges, UpBit has continued experiencing exponential growth with approximately 1M daily users.  UpBit takes over the top spot replacing BitHumb that currently has a trading volume of 686 million and only lists 12 currencies.

The rival exchange, BitHumb began distribution of brochures and opened walk-in customer centers to aid in combating cryptocurrency fraud on Tuesday. The brochures use comics and an easy-to-understand text to make concepts such as hacking, preventative measures and damage control, easy and quick to grasp.