bithumb - Pwim.Net

Senior Worker at Bithumb Triggered Hacking Vulnerability

A senior worker at Bithumb, a leading South Korean crypto exchange, is in a tight spot after a Korean court discovered that he is liable for web safety legislation breaches. As a result, his misdeeds left the crypto exchange vulnerable to a 2017 hack that led to the loss of cryptocurrency holdings worth $6 million USD. The personal data of 31,000 users was also lost.

Costly mistakes

Prosecutors noted that the worker made serious safety protocol mistakes. As a result, they are pushing for him to be fully liable for the dire choices he made. The 48-year-old man who was only identified using his surname, Lee, finds himself in hot soup as he now may be charged as an accomplice in the hacking incident.

The court noted that Lee was ignorant as he did not install an antivirus in his business PC. Additionally, he did not encrypt user information.

Nevertheless, Bithumb is not off the hook yet because the judge stated that the crypto exchange did not act hastily and prudently to avert the hacks. Additionally, the judgements found that Bithumb had also not done enough to prevent follow-up assaults on the exchange.

Crypto exchanges hacked at an alarming rate

Despite the 2017 Bithumb hacker being arrested and incarcerated for three years, crypto exchanges have been on the receiving end because a number of them have been falling prey to hackers.

For instance, in May 2019, one of the largest crypto exchanges in trading volume, Binance, became a victim of a large scale security breach, whereby 7000 Bitcoins were stolen in one single transaction by hackers. Notably, hackers utilize both internal and external methods, such as viruses and phishing, to gather a large number of 2FA codes, API keys, and other vital information.

Conversely, according to a CipherTrace report, in 2019, hacks, scams, and thefts cost the crypto sector a whopping $4.4 billion. Therefore, showing the need for crypto exchanges to integrate stringent measures to curb hackings.

Image via Shutterstock

South Korea’s Leading Crypto Exchanges Aid Police in Hunting "Nth Rooms" Blackmail Porn Members

The four primary crypto exchanges in South Korea, namely Coinone, Korbit, Bithumb, and Upbit, have reportedly offered to help police investigate the sexual exploitation of underage girls in the “Nth Rooms” scandal that has sparked a national outcry.

Crypto exchanges table vital information

The sexual exploitation of underage school-going girls in South Korea has been happening for years in the “Nth Rooms” incident. Notably, they would be filmed undertaking violent self-harm and sexual acts, and the videos taken were made available via Telegram chat rooms after members made crypto payments.

It is reported that at least 10,000 people utilized these chatrooms after paying fees ranging from $200 to $1,200.

Following thorough investigations by the South Korean police, dozens of victims have been established as the videos usually presented the girls’ addresses and names. Currently, the police have identified 74 people, including 16 underage girls who were exploited.

Crypto exchanges seek to reveal crucial information about this scandal that has left people across the globe mouth agape because of the inhumanity rendered to underage girls. It is alleged that among the 10,000 members in the “Nth Rooms” were famous startup company CEOs, sports stars, popular artists, and professors.

The ringleader of the blackmails and chat rooms was revealed as 24-year-old Cho Ju-bin after at least 5 million South Koreans signed petitions to have him named.

Crypto exchanges heed the call

Following requests by the South Korean police for assistance, the four leading crypto exchanges in this nation seek to comply with this appeal by offering crucial information that will be instrumental in unraveling the culprits in the “Nth Rooms” scandal.

Earlier this month, the country’s national assembly amended the Act on Reporting and Use of Specific Financial Information, and this officiated the legalization of cryptocurrency trading and holding.

Once implemented, this law will be instrumental in averting crimes, such as the “Nth Rooms” scandal and money laundering given that crypto businesses, such as exchanges, wallet companies, and trusts, will be required to have a real-name verification partnership with an approved local bank. As a result, a verified person will be assigned a single bank account where he/she can deposit and withdraw fiat currency to and from an exchange.

Image via Shutterstock

South Korean Police Raid Bithumb Crypto Exchange Headquarters On Fraud Allegations

South Korean Police have raided the headquarters of Bithumb, South Korea’s largest cryptocurrency exchange on trading volume, reportedly as part of a wider investigation into embezzlement and fraud.

According to a local media outlet, Newsis reported that on Sep. 2, law enforcement officers from the Seoul Metropolitan Police Agency’s Intelligence Unit raided and searched Bithumb’s central offices in Seoul—confiscating data and seizing computers.

The South Korean police have not yet issued an official statement on the specifics of their investigation into the crypto exchange giant Bithumb. However, both Newsis and a second prominent South Korean media outlet believe that the raid is in relation to a controversial token called BXA—issued by the Blockchain Exchange Alliance (BXA) and the Singapore-based BXA consortium.

The Blockchain Exchange Alliance was reportedly due to be taken over by a Singapore-based South Korean firm, but the deal fell through when the firm defaulted on payment. A condition of the takeover was an obligation for Bithumb to list the BXA token, which it never did following the default.

Ever since the failed takeover, the BXA token has plunged in value after raising over $24 million in its initial coin offering (ICO) which was heavily bought into by South Korean investors. The investors in South Korea believe that Bithumb failing to list the token makes the exchange responsible for their losses.

A group of BXA investors has been trying to push ahead with a legal case against Bithumb executives Lee Jung-hoon and Kim Byung-gun. Lee is the chairman of the board of directors of Bithumb Holdings and Bithumb Korea.

Newsis also reported that South Korea’s police are also looking into possible violations of the country’s Foreign Exchange Transaction Act and the Capital Market Act.

South Korean Crypto Crackdown

Bithumb is the second major Korean crypto exchange to be raided in less than as many weeks. As reported by Blockchain.News on Aug. 27, the Seoul Metropolitan Police Agency alleges that Coinbit has gained unfair income to the tune of 100 billion won, approximately $84 million following 99% trade volume deceit of cryptocurrencies like Ripple (XRP), Ethereum (ETH), and Bitcoin (BTC).

Following an insider’s tipoff about the malicious ongoings at Coinbit in May, the police sprung into action by confiscating hardware and searching Coinbit’s properties, including the exchange headquarters office.

The authorities revealed that they gathered concrete evidence against Coinbit’s owner Choi Mo and the management team for manipulating the market price and inflating trade volume using a tactic called bicycle transactions, whereby multiple ghost accounts were used in buying and selling coins inside the exchange. This deception was unraveled after 99% of the total sales emerged to be transactions without withdrawal and deposit details.

South Korean Police Raid Bithumb Crypto Exchange For Second Time in BXA Token Fraud Case

Bithumb, the largest cryptocurrency exchange in Korea has been raided for a second time in five days by the Seoul Metropolitan Police Agency’s Intelligent Crime Investigation Unit in connection to the BXA token fraud allegations against its Chairman.

Following an initial raid on Bithumb headquarters in Seoul on Sept. 2 in connection with fraud charges, South Korean police returned for an additional search and seizure at the crypto exchanges head office in Gangnam-gu on Sept. 7.

According to local publication Seoul Shinman, this time a police official was able to confirm that the latest search of the head office aims to provide evidence to support the allegation against Bithumb Korea and Bithumb Holdings Chairman, Lee Jung-hoon.

The allegations against the Chairman are in relation to a controversial token called BXA—issued by the Blockchain Exchange Alliance (BXA) and the Singapore-based BXA consortium. The Blockchain Exchange Alliance was reportedly due to be taken over by a Singapore-based South Korean firm, but the deal fell through when the firm defaulted on payment. A condition of the takeover was an obligation for Bithumb to list the BXA token, which it never did following the default. Ever since the failed takeover, the BXA token has plunged in value after raising over $24 million in its initial coin offering (ICO) which was heavily bought into by South Korean investors. The investors in South Korea believe that Bithumb failing to list the token makes the exchange responsible for their losses.

Lee Jung-hoon has since been accused of fraud by the investors who allege that the Bithumb Holding Chairman colluded with BK Group Chairman Kim Byung-gun to raise the $24 million and tank the project.

Bithumb CEO Summoned by South Korean Authorities Following Police Raid on Offices

The Chairman of the Board of Directors of Bithumb Holdings, Lee Jung-hoon has been summoned by the Seoul Metropolitan Police Agency’s Intelligent Crime Investigation Unit.

Per reports from South Korea’s Yonhap News Agency, Chairman Lee was summoned on allegations of defaulting to list the controversial token called BXA tokens.

As Blockchain.news previously reported, the genesis of Bithumb and Lee’s tussle with the authorities was fueled by the BXA tokens reportedly issued by the Blockchain Exchange Alliance (BXA) and the Singapore-based BXA consortium. The Blockchain Exchange Alliance was reportedly due to be taken over by a Singapore-based South Korean firm, but the deal fell through when the firm defaulted on payment. A condition of the takeover was an obligation for Bithumb to list the BXA token, which it never did following the default.

As Bithumb refused to list the token, its initial value of about 30 billion Korean Won (US$25.8 million) raised in its Initial Coin Offering began to drop, a situation that angered investors.

Prior to the summons of Chairman Lee ,who is also being investigated for Property Theft, the South Korean police have raided the office of the country’s largest cryptocurrency exchange by volume on two occasions.

Bithumb is one of Two Korean Exchanges Raided By Authorities

While the investigations into Bithumb are yet to be concluded following the incessant raid of the exchange by the authorities, Conbit, the nation’s third-largest cryptocurrency exchange was also raided by the police for alleged arbitrage manipulation of Bitcoin (BTC), Ripple (XRP), and Ethereum (Eth) transaction volume.

Following the raid of Coinbit, the authorities were able to uncover about 99% trade manipulation resulting in the exchange earning an unfair income to the tune of 100 billion won, approximately $84 million. Despite these irregularities in the country’s top exchanges, South Korea still remains a top crypto hub with the government’s interest in developing its own CBDC picking up momentum in recent times.

Embattled Korean Crypto Exchange Bithumb May Be Acquired by Huobi

Embattled South Korean-based cryptocurrency exchange Bithumb has gotten offers from potential companies who wish to acquire it including Chinese-based Huobi Global. As reported by local media channel The Bell, Huobi and an unnamed broadcasting company are among top bidders for the Korean exchange.

Blockchain.News reported earlier that Bithumb puts itself for sale amid fraud allegations from the South Korean authorities. As noted by The Bell, the move to acquire Bithumb came following the decision by Bithumb’s shareholders to sell their entire stake in the company. The acquisition deal on offer will thus see the successful bidder take up the ownership of Bithumb with a 100% stake.

An Investment Banking official who was quoted by The Bell noted that the Chinese origins of Huobi may affect the acquisition plans but that its expertise as a cryptocurrency exchange gives it an upper hand. The source also revealed that the firms who have expressed interest in the deal have a “high willingness to take over” Bithumb exchange.

Why is Bithumb up for sale?

Bithumb is currently under the law enforcement’s radars for alleged money laundering. The South Korean police raided Bithumb’s office on two different occasions before finally inviting the exchange’s Chairman of the Board of Directors of Bithumb Holdings, Lee Jung-hoon for questioning.

The origin of Bithumb’s problem started with the exchange’s involvement with the BXA tokens reportedly issued by the Blockchain Exchange Alliance (BXA) and the Singapore-based BXA consortium. According to the reports from Blockchain.news on the matter at the time, the Blockchain Exchange Alliance was set to be taken over by a Singapore-based South Korean firm, but the deal fell through when the firm defaulted on payment. A condition of the takeover was an obligation for Bithumb to list the BXA token, which it never did following the default.

The exchange had already raised about US$24 million and its refusal to list the token had triggered the authorities’ move to investigate the company..

Morgan Stanley in Talks to Acquire Multi-Million Dollar Stake in Bithumb Crypto Exchange

Normal
0

false
false
false

EN-US
X-NONE
X-NONE

US leading investment bank Morgan Stanley is reportedly negotiating to buy a significant share in Bithumb, a major crypto exchange in South Korea.

The person familiar with the matter within the exchange has disclosed the US-based bank approached and is holding discussions with Vidente video equipment maker, a KOSDAQ company, which owns about a 10% of stake in Bithumb crypto exchange.

Another anonymous source revealed that Morgan Stanley is planning to invest between $254 million and $441 million for Bithumb acquisition. The anonymous source said that the reason why Morgan Stanley used Vidente is because it knows that the video equipment manufacturing company has the right to negotiate a preferred sale to acquire Bithumb.

Demand for Vidente shares surged as a result of the acquisition news as the company stock price rose more than 4.5% higher on Friday yesterday.

Rumors that Bithumb crypto exchange is for sale have been moving around for a while as Lee Jung-Hoon, Bithumb chairman and majority shareholder, has been willing to liquidate his position. Bithumb owners have experienced several failed attempts of selling their shares in recent years. Although the exchange became profitable in 2019, it failed to settle a deal with Singapore-based BK Global Consortium for acquisition.

Early January this year, the leading Asian gaming firm Nexon was planning to acquire Bithumb for an estimate of half a billion dollars. However, the report shows that the negotiations between Nexon and Bithumb have fallen apart.

Morgan Stanley Has Its Eye on Crypto

Morgan Stanley is opening itself to embrace Bitcoin and cryptocurrencies. The developments with regards to Morgan plans to acquire Bithumb emerged two days after reports surfaced that the leading US bank has decided to offer its clients access to Bitcoin fund investments via its traditional investment platform. The offer from the bank is a good step towards helping drive companies adopt the emerging asset class.

This is not the first time when the bank is making such an attempt. According to the US securities and exchange commission (SEC), Morgan Stanley acquired 792,627 shares of MicroStrategy business intelligence company in January this year. The bank bought 10.9% stake in MicroStrategy, thus making it the latest financial giant to profit from Bitcoin’s historic bull run.

/* Style Definitions */
table.MsoNormalTable
{mso-style-name:”Table Normal”;
mso-tstyle-rowband-size:0;
mso-tstyle-colband-size:0;
mso-style-noshow:yes;
mso-style-priority:99;
mso-style-parent:””;
mso-padding-alt:0in 5.4pt 0in 5.4pt;
mso-para-margin-top:0in;
mso-para-margin-right:0in;
mso-para-margin-bottom:8.0pt;
mso-para-margin-left:0in;
line-height:107%;
mso-pagination:widow-orphan;
font-size:11.0pt;
font-family:”Calibri”,sans-serif;
mso-ascii-font-family:Calibri;
mso-ascii-theme-font:minor-latin;
mso-hansi-font-family:Calibri;
mso-hansi-theme-font:minor-latin;
mso-bidi-font-family:”Times New Roman”;
mso-bidi-theme-font:minor-bidi;}

South Korea Authorities Seize $47M in Crypto from Tax Evaders

Authorities in the South Korean province of Gyeonggi have conducted the largest tax seizures ever, seizing $47 million in Bitcoin (BTC) and Ethereum (ETH).

According to the coverage reported by the Financial Times, the seizure involved about 12,000 tax evaders. The authority has called the action the largest “cryptocurrency seizure for back taxes in Korean history.”

Those “tax dodgers” committed the crime by connecting their trading or investment activities on trading platforms operating in the country with their phone numbers. The process, though rigorous, had to be done manually as crypto exchanges were unable to fully provide the Know-Your-Customer (KYC) details of the defaulting taxpayers. In addition, the FT report was unclear which digital currency trading platform was involved in the investigation.

South Korea has a robust cryptocurrency trading engagement amongst its citizens, and the country has been making moves to implement accomodating regulations. One of these is the law passed by the Korean National Assembly in March 2020. This law mandates cryptocurrency exchanges to take down customer’s details through KYC and obtain licenses to operate from banks.

While big exchanges such as UpBit have been able to comply, other smaller trading platforms have had their struggles in complying, a situation that was compounded by financial institutions dissociating from crypto exchanges. Besides these, South Korea has long been mulling enforcing a 20% capital gains tax on cryptocurrencies, all of which will be made easier with compliant crypto exchanges.

South Korea is one of the more receptive countries to blockchain and cryptocurrency-related innovations. While crypto has thrived in the country in the past decade, the government is taking bold steps to develop its own Central Bank Digital Currency, the Digital Won. Despite its soft stance, however, the nation has zero-tolerance for fraud amongst crypto entities, as showcased in the ongoing raid of Bithumb exchange amidst a broad fraud investigation.

South Korea Top Four Crypto Exchanges Launch Joint Venture To Abide By AML Regulations

Four major crypto exchanges in South Korea have joined hands to establish a joint venture to fight against money laundering. The heads of Bithumb, Korbit, Coinone, and Upbit signed a memorandum to form a system, which will enable them to adhere to the travel rule.

Complying with the travel rule

The travel rule is a global standard imposed by the Financial Action Task Force, an intergovernmental anti-money laundering watchdog, on virtual asset service providers like digital wallet providers and crypto exchanges.

As per the announcement:

“The rule requires virtual asset service providers to share the identities of users involved in any virtual asset transfers over 1 million won ($884).”

The regulation is expected to work like a SWIFT code, which is widely used as the industry standard in traditional financial institutions.

This rule is outlined in South Korea’s cryptocurrency law known as the Act on Reporting and Using Specified Financial Transaction information.

The joint venture is intended to cut costs

In a joint statement, the four companies noted:

“Instead of developing their own systems, the companies decided to co-develop a system that can be used industrywide.”

South Korea has been a notable player in the crypto space.

According to a recent study by Alba Heaven, an information provider, 23.6% of South Korean college students were investing in cryptocurrencies out of 1,750 people.

The survey noted that these students were inclined to invest in this territory based on the global crypto craze experience.

The respondents also cited high investment returns, low barriers to entry, and an opportunity to overcome class hierarchy as other reasons they step into crypto investment.

On the other hand, the South Korean administration announced last month that it was not relenting on its quest to levy a 20% income tax on capital gains from crypto transactions in 2022, despite growing investor concerns for the taxation plan to be delayed.

Upbit Becomes the First Exchange to Register with FIU as September Deadline Looms

South Korea’s largest cryptocurrency exchange, Upbit, has leapt to become the first digital currency exchange for registering with the Financial Intelligence Unit (FIU)- the country’s market regulator.

As unveiled by the government body, the move comes after the exchange completed the requirement to meet the registration, which includes partnering with a local bank to capture customers data for Know Your Customer and Anti-Money Laundering controls.

According to earlier reports, several cryptocurrency exchanges operating in South Korea were having trouble setting up a partnership with banks. The entire crypto sector faces headwinds on the impending regulations. When the September 24 deadline comes, the FIU will take down the websites of exchanges that have not yet registered, and access to these exchanges by local consumers will be significantly impacted.

On the part of Upbit, its partnership was with K-Bank, a digital bank that will help facilitate real name verification. As reported, other named exchanges, including Bithumb, Coinone, and Korbit, have also secured a similar partnership, and are on track to register with the FIU before the deadline. The review of the application period for Upbit is three months. However, the exchange has bought itself time with the filed registration.

South Korea is taking its digital currency regulations very seriously. The same rules that bind local exchanges are also applicable to their foreign counterparts. In a move to wade off regulatory reprimand, Binance exchange removed all cryptocurrency trading pairs involving the Korean Won from its site. The inability to meet the regulatory standards have also pushed OKEx exchange to shut down its operations in the Asian country.

There is currently a frantic race amongst crypto stakeholders in South Korea to meet the regulators’ demand. The population is highly crypto-centric, and exchanges that scale the FIU’s demands are bound to see a boosted market with less competition.