South Korea’s largest cryptocurrency exchange Upbit is following Binance’s path by asking its vast user base to point out shady multi-level cryptocurrency schemes, or even fraudulent ICOs, in exchange for a reward.
The increasing number of scams in the unregulated cryptocurrency sectors has forced the massive community to be its own watchdog and the involvement of the established firms in the sector for the same purpose is really good news. In the official announcement, Upbit stated that with this move it is aiming to “prevent damage [due] to illegal fraud and to create a sound cryptocurrency ecosystem.”
Though Upbit did not specify further, Hankook Media is claiming that the exchange has launched the program for the duration of one year and will decide on a further extension in March 2019.
“If illegal multi-level 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,” the news outlet quoted Upbit.
Upbit confirmed the reward money stating: “to the original complainant, Upbit pays a reward of KRW 1 million ($940,000).”
The Kakao-backed cryptocurrency exchange was already vigilant towards the scams going on in the market as Hankook Media stated: “Upbit has been tracking illegal multi-level coin recruitment [schemes] with its own monitoring.”
According to reports, the exchange successfully reported more than 20 fraudulent cases to police by March 23. The publication also noted that the exchange received a letter of appreciation in last November from Suwon Chungbu Police Station for reporting a culprit pretending to be the Seoul Metropolitan Police Agency – a rising scamming tactic to ask for ransom in cryptocurrencies.
After Kakao’s recent announcement to launch a blockchain platform, fraudsters already jumped in to dupe people with a fake ICO of Kakao Coin. The exchange said: “recently fraudulent acts impersonating the Kakao Coin ICO are also found.”
Self-policing on rise
Upbit became the second cryptocurrency exchange to launch such a reward program, as earlier this month Binance launched a similar program to catch the culprit following a hacking attempt on the platform. According to News.Bitcoin.com, another South Korean exchange, Bithumb, distributed cautionary brochures on Tuesday to aware the society against the wide variety of scams.