Binance, the largest cryptocurrency exchange by trade volume, released a report on April 9e regarding the details of a cryptography project that lost nearly 4,000 ETH in November 2018 due to fraud. The exchange is following the case and has worked with the Korean and Ukrainian authorities to recover the stolen amount.
Discovery of a fraud case at B.K
In November 2018, a Korean-based cryptocurrency exchange lost 3,995 ETH, or around 10 billion Korean won (KRW) in a fraud attempt. The unnamed cryptography project quickly reported the case to the relevant Korean authorities, after which investigations were launched.
According to police records, the victim claims that the suspect (who is a user of the Binance exchange) obtained unauthorized access to the victim’s internal emails. Once in charge of the victim’s e-mail account, the suspect (whose initials are B.K) was able to exploit the victim because they were able to determine the cryptography project wanted to list on Binance.
Binance’s statement reads as follows:
“The suspect then sent emails posing as a” Binance representative “, promising to help list the victim’s cryptocurrency on Binance, for a fee. As a security deposit for the victim, the suspect received a cryptocurrency (ETH) payment worth around KRW 10 billion. “
Air fraud often results in reverse damage, including some bad PR, but the first principles must be maintained.
In fact, I was not involved in this matter at all. The team made all the right decisions according to our principles. https://t.co/khLsZvxrPX
– CZ Binance 🔶🔶🔶 (@cz_binance) April 9, 2020
Binance cooperation with Korean / Ukrainian authorities
In early January 2019, the Korean authorities contacted the exchange to request the freezing of the suspect’s exchange portfolio and the reimbursement of the victim’s funds. The report also reads,
“After completing all internal due diligence steps, Binance responded to the request from Korean law enforcement and returned the funds.”
However, the exchange also received a call from the Ukrainian authorities on the case with a complaint from the suspect, B.K. The exchange explained the case to the authorities to sort out the complaints. Binance has further promised its service to official authorities around the world, saying they will work “with law enforcement agencies around the world and are ready to provide additional information and documents if required by law in order to combat fraud and to do justice to these cases. “
Changpeng “CZ” Zhao further warns anyone involved in frau not to use the exchange. He wrote on Twitter,
“Please do not use Binance if you are involved in fraud.”
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