Crypto Exchanges in South Korea Prevented Millions of Dollars from Falling into Romance Scams

Romance scams are a form of online fraud where criminals pretend to be interested in a romantic relationship with their victims, only to trick them into sending money or crypto to them. In 2023, South Korean crypto exchanges blocked over $82 million worth of transactions linked to romance scams, according to a report by Seoul Shinmun.

Coinone Leads the Way in Detecting and Stopping Romance Scams

One of the crypto exchanges that took proactive measures to protect its customers from romance scammers was Coinone. The exchange said that it had halted over $2.6 million worth of romance scam-linked trades, using an “abnormal transaction detection system” and “24-hour monitoring” network.

Coinone shared an example of how it prevented a male customer in his 60s from losing all of his crypto holdings to a romance scam group. The customer had met a woman who claimed to be the owner of a hair salon in Japan through a chat app. She asked him to send Bitcoin to a “crypto exchange” before coming to visit him in South Korea. The exchange turned out to be bogus, and Coinone alerted the customer that he was likely the target of a romance scam.

Coinone said that catfishing and other romantic scams that make use of crypto were now “rampant” in South Korea.

FSS Warns the Public of the Rise of Crypto-Related Scams on Social Media

The Financial Supervisory Service (FSS), the regulator of the financial sector in South Korea, also issued a warning on January 22, 2024, about the increase of crypto-related scams on social media platforms. The FSS advised the public to be careful of romance scammers, as well as unsolicited investment-related “recommendations and advice.”

The FSS said that the public should be “particularly” wary of “people of the opposite sex or strangers who say they will help with investment.” The regulator added that “romance scammers” are often “affiliated” with “illegal” or bogus crypto exchanges, and that they may use fake profiles, photos, and stories to lure their victims.

The FSS urged the public to verify the identity and credibility of the people they interact with online, and to report any suspicious activities to the authorities.

Other Crypto Exchanges Join the Fight Against Romance Scams

Coinone was not the only crypto exchange that took action against romance scams in 2023. Other South Korean exchanges also implemented round-the-clock transaction monitoring to block suspicious withdrawal requests. They also built databases of suspected scam crypto exchanges, and cooperated with regulators to find and report bogus trading platforms.

The efforts of the crypto exchanges in South Korea to combat romance scams were commendable, as they showed their commitment to protect their customers and the integrity of the crypto industry. However, the problem of romance scams was not limited to South Korea, as it was a global phenomenon that affected millions of people every year.

Therefore, crypto users around the world should be vigilant and cautious when dealing with strangers online, and never send money or crypto to anyone they have not met in person.