QUADRIGA INITIATIVE
CRYPTO WATCHDOG & FRAUD RECOVERY PLATFORM
A COMMUNITY-BASED, NOT-FOR-PROFIT
UNKNOWN
MAY 2021
SOUTH KOREA
BITBUY KOREA
DESCRIPTION OF EVENTS
"An unaffiliated South Korean organization has, under the false guise of being “Bit Buy Korea,” exit scammed users after promising high returns on investment and leveraging." The scam exchange is, “not a registered corporation with the [Korean] registry office.” The "domestic futures exchange is attracting customers with leverage of 'up to 500 times '."
"Bitbuy Korea wrote down the name of the account holder, bank, and account number right away when registering as a member. In the process, there was no procedure such as account verification. After signing up, you could easily change your deposit account by simply verifying your mobile phone number."
A YouTuber introducing BitBy Korea by explaining "If you invest in Bitcoin, the cryptocurrency exchange pays interest, which is called funding fee or staking interest."
"However, funding fee and staking (deposit) interest are different concepts. Staking, like a deposit or savings account, pays interest to users who entrust their cryptocurrency to the blockchain network."
"In contrast, the funding fee is a system to match the short (long) and short (short) ratios. If the position attracts users, it means that you have to pay a 0.5% funding fee to the exchange."
"At the end of April, Bit Buy Korea left a notice as if it was related to BitBuy, saying, 'For inquiries about the Canadian headquarters, please contact us at the Canada-only phone number.'"
"Bitbuy.ca tweeted from its official twitter explaining that there is no affiliation with the scam exchange, and that the use of the official Bitbuy logo is unauthorized."
Afterwards, Bitbuy Korea changed the logo saying, "The use of the logo has not been negotiated." Regarding the controversy, an official from Bit Buy Korea said, "I signed a contract with one of Bit Buy's affiliates, not Bit Buy's headquarters.".
"BITBUY KOREA, allegedly swindled money from hundreds of victims by luring investors into sending money to the exchange, then closing down the site." "Over 670 victims are planning to file a complaint with the Seoul Eastern District Prosecutor's Office soon."
BitBuy Korea launched a platform using similar branding to BitBuy (an exchange in Canada), and offering 500x leverage. The company was unregistered in South Korea and the website later closed down without providing depositors back their funds.
HOW COULD THIS HAVE BEEN PREVENTED?
A reasonable lightweight framework would mean that the vast majority of firms were registered, and investors could expect registration.
https://bitbuy.ca/assets/documents/Bitbuy-ExDD-Report-Q1_Q2_2021-Limited-Open-Source-Edition.pdf (Oct 31)
"레버리지 500배" 비트바이 코리아 실체는? - CoinDesk Korea 신뢰 그 이상의 가치 (Dec 5)
@bitbuy Twitter (Dec 5)
비트바이 코리아(BITBUY KOREA) - 안정성 높은 비트코인 레버리지 거래소 (Dec 5)
Bitcoin Margin Trading Exchanges in Korea - YouTube (Dec 5)
'Server shutdowns' at crypto exchanges rekindle concerns (Dec 5)
