Korean National Police Agency signs MOUs with 5 major crypto exchanges to block phishing money laundering

By Kim A-rin, The Herald Business

South Korean police are joining forces with the country's leading virtual asset exchanges to strengthen their response to voice phishing and other telecommunications financial fraud.

The Korean National Police Agency signed MOUs Thursday with five domestic virtual asset exchanges — Dunamu, Bithumb, Coinone, Korbit and Streami — to prevent and eradicate phishing crimes.

The signing ceremony was held at the Telecommunications Financial Fraud Integrated Response Unit conference room in Seodaemun-gu, Seoul. Representing their respective organizations were Oh Chang-bae, head of the agency's Telecommunications Financial Fraud Integrated Response Unit; Yang Du-ho, compliance officer at Dunamu; Byeon Seung-mu, compliance officer at Bithumb; Jang Seok-won, head of external affairs at Coinone; Hong Eun-hee, compliance officer at Korbit; and Cha Seung-jik, head of the compliance center at Streami.

According to the agency, phishing operations have increasingly been laundering stolen funds through virtual assets, which are difficult to trace. In response, an amendment to the Special Act on Prevention of Damage from Telecommunications Financial Fraud and Reimbursement of Victim Assets — set to take effect in October — will impose on virtual asset operators the same anti-phishing and victim relief obligations currently required of financial institutions, including the reimbursement of stolen assets.

Ahead of the law's implementation, the agency pursued the agreement to link its investigative intelligence with the security technology of the five exchanges, aiming to build an effective public-private response framework.

A public-private information-sharing system the agency had been piloting since mid-March will be upgraded to a permanent cooperative arrangement under the new MOUs. The agency will provide exchanges with real-time investigative data, which the exchanges will feed into their own abnormal transaction detection systems to help identify suspected phishing activity.

At Thursday's ceremony, the agency also presented commissioner general commendations to staff from Bithumb and Coinone for their contributions to fraud prevention during the pilot period. In March, the two exchanges identified customers attempting to transfer funds after being deceived by scammers impersonating law enforcement, preventing losses of 40 million won (about $29,600) and 38 million won, respectively.

"As voice phishing and new forms of scam crime increasingly use virtual assets to launder funds, this agreement will serve as a meaningful step toward protecting the public," Oh said. "We will continue to deepen cooperation with private-sector partners to prevent phishing crimes."

Byeon, Bithumb's compliance officer, said the exchange had been continuously improving its detection systems to counter various phishing schemes. "Through cooperation with the Korean National Police Agency, we will build a faster and more sophisticated response framework and strengthen our capacity to protect users," he said.