South Korea’s Biggest Cryptocurrency Exchange Warns Investors About Voice Phishing
Bithumb, South Korea’s biggest cryptocurrency exchange, has warned its investors about voice phishing and increasing cases of direct phishing scams, as investors have continued to lose large sums of cryptocurrencies throughout the past year from phishing attacks.
On May 2, Bithumb invited its investors into its headquarters in Seoul, South Korea, to increase the awareness of cryptocurrency investors towards various types of cryptocurrency scams and phishing attacks.
A representative at the cryptocurrency exchange said that even veteran investors in the cryptocurrency market can fall victim to phishing attacks in an instant, especially when unexpected.
“Individuals who are confident that they will never fall victim to phishing attacks often experience various types of phishing attacks. Investors must be aware that no financial institution in the global market requires or encourages users to create bank deposits and use online banking to send transactions. More importantly, no exchanges or banks require users to reveal their OTP and SMS 2FA verification codes,” said the representative.
In February, it was reported that a middle-aged individual fell victim to a phishing scam conducted by a scammer disguised as a policeman at the Seoul police department. The individual sent more than $160,000 to the scammer through four bank deposits.
Instead of taking the $160,000 that were stolen from the individual, the scammer decided to invest the stolen funds in cryptocurrencies including bitcoin and Ethereum on Upbit and Bithumb, two of South Korea’s biggest exchanges. According to Joong Ang, the largest mainstream media outlet in South Korea, the scammer purchased a large amount of Ethereum with $140,000 and bitcoin with $20,000 on Bithumb.
A few days later, the individual called the Seoul police department and tried to verify whether he sent the funds to a policeman at the department or fell victim to a phishing scam. After realizing that he fell for a scam, he notified his bank which then communicated with Upbit and Bithumb to prevent any withdrawals from being made from the two cryptocurrency trading accounts.
Subsequent to weeks of investigation, it was disclosed that the scammer could not withdraw the funds he used to purchase bitcoin and Ethereum on Upbit and Bithumb, because the two accounts were frozen. The victim was able to receive the $140,000 from the exchanges.
But, during that time, the price of Ether and bitcoin surged and as a result, the $140,000 that were stolen from the victim turned into $250,000, increasing by nearly two-fold.
At the time, the Financial Services Commission (FSC) said that in the second half of 2017, more than $14 million worth of funds were stolen from phishing attacks and that it will continue to work with financial institutions to prevent phishing attacks from impacting individual investors.
The victim in this unique case was lucky to have his funds back and more to that, a bonus of nearly two-fold of his initial funds. But, the vast majority of victims end up not being to recover their funds and suffer hundreds of thousands of dollars in losses.