Upbit at forefront of fighting phishing scams

Upbit’s headquarters in Gangnam, southern Seoul (Dunamu)

South Korea's largest cryptocurrency exchange Upbit has been at the forefront of preventing fraudulent digital transactions, with its state-of-the-art artificial intelligence-based fraud detection system, amid increasing virtual asset investment and related crimes.

Using its latest technology, the company said Tuesday it has prevented voice phishing scams of some 25 billion won ($18.9 million).

According to South Korea’s financial authorities, the annual scale of financial damages from voice phishing scams is estimated at 145.1 billion won as of 2022, with damages from internet banking-related crimes on a steady rise.

Considering that virtual asset trading happens 24/7, a system that enables advanced prevention of related crimes is imperative. In this aspect, Upbit has set an example by continuously updating its fraud detection system and transaction monitoring system.

While conventional fraud detection systems in financial institutions primarily analyze basic transaction patterns and rules, such as transactions exceeding certain amounts, Upbit is equipped with AI technology, operating on a cyclical system that continuously learns from transaction patterns and automatically updates the system on its own

First, it simulates various abnormal withdrawal scenarios by analyzing cases resulting in damages, user information and transaction patterns. The information derived from these simulations and data sets is then fed into machine learning models for training, which is then used as the criteria for detecting abnormal deposits and withdrawals.

Additionally, the system is capable of detecting novel types of crimes such as SIM swap fraud, as it can recognize repetitive attempts by individuals as a pattern, thus enabling the detection of evasive actions observed after abnormal transactions.

Upbit has recently been ramping up collaboration with banks, financial authorities and investigative agencies to safeguard the "golden hour," proactively prevent virtual asset crimes and mitigate damages.

In September 2021, Upbit prevented voice phishing damage worth 120 million won while playing an instrumental role in the on-site arrest of a suspect for fraudulent trading. By freezing their accounts, as of July this year, Upbit has managed to return funds of some 9.2 billion won to victims.

Upbit has earned recognition both at home and abroad for its excellent track record and distinguished monitoring system. It received an A grade in the benchmark ranking by UK blockchain analytics firm CryptoCompare, becoming South Korea's top exchange and ascending into the global ranks of the top 10 exchanges.

Upbit has also established a multifaceted protection system for investors, including a 24-hour dedicated call center and free psychological counseling service provisions for those directly affected by virtual asset fraud.

“In addition to our advanced fraud detection system, we also have the largest workforce dedicated to curbing money laundering crimes,” said an official from Dunamu, the operator of Upbit.

“We will continue our battle against evolving digital crimes.”

By Song Jung-hyun(junghyun792@heraldcorp.com)