495 cases resolved with Seoul Metropolitan Police Agency and Kakao Bank
Exchange moves to direct victim relief after revised telecom fraud law takes effect
Coinone said Tuesday it had helped recover about 7.5 billion won ($5.66 million) in losses from voice phishing and other telecommunications fraud over the past three years.
From October 2023 through September this year, Coinone worked with the Seoul Metropolitan Police Agency to return about 2.47 billion won directly to victims across 83 cases. Through a separate reimbursement process established with Kakao Bank — its real-name account partner bank — the exchange supported the return of about 5.01 billion won across 412 cases.
Until recently, digital asset exchanges were not classified as financial companies, meaning no official procedure existed for verifying victims' information or returning stolen funds. Even when an exchange froze an account after receiving a fraud report, returning the money to victims remained difficult, and prolonged delays risked extinguishing victims' legal claims under statutes of limitations.
In response, Coinone built its own reimbursement procedures in coordination with law enforcement and financial institutions. The Seoul Metropolitan Police Agency traced transaction records and fund flows across thousands of accounts to identify victims, while Coinone supported the calculation and return of stolen funds. The arrangement allowed the exchange to recover funds that had been sitting in accounts even before the Virtual Asset User Protection Act took effect in 2024.
Starting in October 2024, Coinone and Kakao Bank operated a joint framework for recovering stolen funds, including a dedicated hotline to verify and process returns.
The revised Telecommunications Fraud Victim Compensation Act, which took effect Oct. 1, changed how victim relief is handled. Coinone shifted from coordinating with financial institutions to a system in which the exchange directly carries out the victim relief process.
Meanwhile, Coinone's user protection team received a commendation from the Seoul Metropolitan Police Agency for its work supporting the recovery of residual voice phishing funds in 2024. In June, the team also received a commendation from the Korean National Police Agency commissioner general for its contributions to phishing prevention.
"We felt the greatest sense of pride when victims reached out to thank us for getting their money back," a Coinone user protection team official said. "Even after the revised law has taken effect, we will continue working closely with relevant agencies to ensure stolen funds are returned to victims as quickly as possible."
Meanwhile, Coinone took first place in September at a hands-on incident response competition co-hosted by Megazone Cloud and Datadog.
kyoung@heraldcorp.com
