[2018-03-28] South Korean Exchange Paying Users to Report Illegal Crypto Schemes

[Terraformer]

The Kakao-backed cryptocurrency exchange Upbit has launched a system to reward users for identifying fraudulent multi-level schemes related to cryptocurrencies. The exchange has already identified and reported 20 such schemes to the police.

Reporting Illegal Schemes

South Korea’s largest cryptocurrency exchange Upbit has invited all of its users to use its new system aimed at identifying multi-level, illegal scams posing as cryptocurrencies or initial coin offering (ICO) tokens.

Upbit wrote in its announcement recently that the number of illegal multi-level and ponzi fraud cases has been increasing and its new system attempts to “prevent damage [due] to illegal fraud and to create a sound cryptocurrency ecosystem.” The Kakao-backed exchange asks all of its users to participate in order to prevent cryptocurrency fraud. According to Hankook Media, the system will be in effect for one year and will end in March 2019; Upbit will decide later if this period will be extended.

“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 elaborated. Upbit confirmed:

"To the original complainant, Upbit pays a reward of 1 million won (~USD$930)."

Reporting a suspected illegal scheme can be done through the Upbit app by choosing the Kakao Talk consultation option, Upbit detailed.

At the time of writing, Upbit is South Korea’s largest crypto exchange and the third largest globally with a 24-hour trading volume of $1.1 billion. Bithumb is the second largest exchange in the country with $686 million trading volume in the same time period.

Continue reading >> https://news.bitcoin.com/south-korean-exchange-paying-users-report-illegal-crypto-schemes/

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[ranman09]

Wow, this is a great start for an exchange. I hope they do this in some sort certification thing. Like certifying that an ICO is not a ponzi scheme.

[jseverson]

I hope they do this in some sort certification thing. Like certifying that an ICO is not a ponzi scheme.

For a while I thought what you were saying was basically equal to ICO permit-based regulations, as scammy ICOs won't be given permits. A certification system may be more efficient though, as the regulatory bodies will only need to screen those that apply. ICOs will still be able to run like they used to, but more and more investors are going to be asking for certifications, in turn killing illegitimate ones. Not a bad idea at all.

But yeah, this is an excellent initiative by Upbit. I thought of how it could be exploited, but I guess the police report at the end kind of discourages that. More exchanges should do this to show concern for their customers.

[prehisto]

I hope they do this in some sort certification thing. Like certifying that an ICO is not a ponzi scheme.

For a while I thought what you were saying was basically equal to ICO permit-based regulations, as scammy ICOs won't be given permits. A certification system may be more efficient though, as the regulatory bodies will only need to screen those that apply. ICOs will still be able to run like they used to, but more and more investors are going to be asking for certifications, in turn killing illegitimate ones. Not a bad idea at all.

But yeah, this is an excellent initiative by Upbit. I thought of how it could be exploited, but I guess the police report at the end kind of discourages that. More exchanges should do this to show concern for their customers.

I think that the majority of community agrees with you as I, that the certification is needed in some level. But I see that there could be problem that gov tend to over complicate things and make the certification seriously complex in this case the ICo would lose the popularity as faster way to raise fund that the existing ones.

Nevertheless I think that the rewarding for reporting crypto scams is a very good thing.

[ranman09]

I hope they do this in some sort certification thing. Like certifying that an ICO is not a ponzi scheme.

A certification system may be more efficient though, as the regulatory bodies will only need to screen those that apply. ICOs will still be able to run like they used to, but more and more investors are going to be asking for certifications, in turn killing illegitimate ones. Not a bad idea at all.

I think that the majority of community agrees with you as I, that the certification is needed in some level. But I see that there could be problem that gov tend to over complicate things and make the certification seriously complex in this case the ICo would lose the popularity as faster way to raise fund that the existing ones.

Nevertheless I think that the rewarding for reporting crypto scams is a very good thing.

Well, this is bitcoin. If we centralize stuff then it will not be reliable. What about a whole decentralized blockchain system that gets votes from people. It will certify the ICO if it meets criteria and amount of votes. This way it will be reliable and we won't have the problem of a certain group of people complicating things out. I mean we can also vote for what criteria an ICO must have.

[Kprawn]

This is what it supposed to be done by our Crypto currency community. We should police our own network and weed out the

bad services by rewarding the people who expose them. I know the Winklevoss twins are trying to establish some kind of

entity that would help to regulate this. The idea to reward people for doing this is an excellent innovation and a good move to

get rid of these scams.