BitKRX Exit Scam

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BitKRX

BitKRX was a crypto-asset trading platform launched using the name and branding of KRX, a major stock exchange in South Korea.

Rather than giving users the promised funds, the platform typically kept them. It is believed that affected users have no recourse at present to obtain their lost funds.

This exchange or platform is based in South Korea, or the incident targeted people primarily in South Korea.

About BitKRX

"BitKRX was a South Korean Bitcoin exchange." "It took on the name of the real Korean exchange, KRX." "Korea Exchange (KRX) [was] the largest financial trading platform in South Korea established by KOSDAQ, South Korea Futures Exchange and South Korea Stock Exchange." "Based on public goodwill towards KRX, BitKRX was able to lure investors who believed BitKRX was run by KRX." "BitKRX claimed to be a branch of the KRX and a creation of KOSDAQ - the trading board of KRX." "The BitKRX exchange marketed itself as a branch of KRX, coaxing users into its platform by promoting its businesses as a regulated and legitimate venture led created by KRX." "This imitation allowed them to pass as a legitimate and compliant cryptoasset exchange."

"The firm lured its users in with promises of ridiculous profits." "The platform was designed so well that it was difficult for most persons to distinguish between the BitKRX website and the KRX one."

"BitKRX wreaked havoc on local investors." "It was found that 99% of its transaction volume was fabricated." "[B]y 2017, people began to report their money was being stolen through the exchange, after they noticed the Bitcoin they had purchased had mysteriously vanished. While the scam was exposed, nobody truly knows how much of the cryptoasset was stolen."

"Chosun, one of South Korea's largest mainstream media, said local financial authorities and law enforcement have started cracking down on crypto currency exchanges using deceptive marketing and fraudulent operations. In particular, local financial authorities have revealed that several crypto currency exchanges in South Korea are unregulated, but operate under the guise of legitimate companies, using the brands of major financial institutions, such as BitKRX, to do so."

This exchange or platform is based in South Korea, or the incident targeted people primarily in South Korea.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

• Known history of when and how the service was started.
• What problems does the company or service claim to solve?
• What marketing materials were used by the firm or business?
• Audits performed, and excerpts that may have been included.
• Business registration documents shown (fake or legitimate).
• How were people recruited to participate?
• Public warnings and announcements prior to the event.

Don't Include:

• Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
• Anything that wasn't reasonably knowable at the time of the event.

There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

The Reality

This sections is included if a case involved deception or information that was unknown at the time. Examples include:

• When the service was actually started (if different than the "official story").
• Who actually ran a service and their own personal history.
• How the service was structured behind the scenes. (For example, there was no "trading bot".)
• Details of what audits reported and how vulnerabilities were missed during auditing.

What Happened

The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.

Key Event Timeline - BitKRX Exit Scam

Date	Event	Description
December 25th, 2017 12:00:00 AM	Main Event	Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.

Total Amount Lost

The total amount lost is unknown.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

Immediate Reactions

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

Ultimate Outcome

What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

Total Amount Recovered

There do not appear to have been any funds recovered in this case.

What funds were recovered? What funds were reimbursed for those affected users?

Ongoing Developments

What parts of this case are still remaining to be concluded?

Prevention Policies

The South Korean government provided their citizens with no way of validating the legitimacy of operation of any crypto-asset platform.

The BitKRX platform was run by individuals who were not background checked nor trained, and no multi-signature wallet was known to be employed. However, the largest issue comes from a lack of validation that assets on the platform were backed, which resulted in the shortfall, as platform operators were misappropriating customer funds.