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South Korea is concerned about fraud in Bitcoin market

The government of South Korea and local financial authorities have warned investors about the appearance of fake cryptocurrency and Bitcoin exchanges.

26.Dec.17 12:10 PM
By Daria Zaytseva


South Korea is concerned about fraud in Bitcoin market

On December 13, the South Korean government and its cryptocurrency target group, formed by the Ministry of Strategy and Finance, Financial Services Commission, Ministry of Justice, Fair Trade Commission and Financial Supervisory Commission held an emergency meeting to discuss the state of the South Korean cryptocurrency market and draft rules for business and investors.

Given the rapidly growing number of fraudulent cryptocurrency exchanges, platforms and activities, the government of South Korea immediately moved to regulating cryptocurrency exchange and hacking of fraudulent transactions.

Last week, several counterfeit exchanges of cryptocurrencies were exposed by the local community of Bitcoin and financial authorities. One of the fake exchanges was BitKRX, named after Korea Exchange (KRX), the largest financial trading platform in South Korea, created by KOSDAQ, South Korean futures exchange and South Korea's stock exchange. BitKRX has established itself as a branch of KRX, drawing users to its platform, promoting its business as a regulated and legitimate enterprise created by KRX.

Earlier this week, the largest in South Korea cryptocurrency exchange Bithumb, which is also the second largest trading platform in the global cryptocurrency market, said that the right set of rules for business and investors would stimulate the market of cryptocurrency and promote its exponential growth.

For cryptocurrency exchanges, such as Bithumb, Korbit and Coinone, which process billions of dollars in the day of trading, the rules are necessary, because quite a large proportion of investors in the South Korean cryptocurrency market are falling victim to Ponzi schemes and fraud.

This month, the local law enforcement system disclosed the Ponzi scheme, based on a $200 million cryptocurrency. 14 people from MiningMax, Ponzi's development schemes in the cloud, were arrested by the South Korean police with several charges, including economic crimes and fraud.

According to data, the South Korean exchange of cryptocurrencies accounts for only 4.6 percent of the global cruptocurrency exchange market behind the US, Japan and Europe.

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