The South Korean cryptocurrency exchange believes in industry self-policing.
Upbit, one of the largest cryptocurrency exchanges in the world, has awarded 1 million won ($929) to six people for reporting fraudulent cryptocurrency-related schemes, according to news.bitcoin.com.
Upbit is based in South Korea and accepts only residents of South Korea who are above the age of 18 as customers. The fact that it handles more than $300 million worth of cryptocurrency trading daily (according to coinmarketcap.com) shows how popular cryptocurrency trading is in the country.
Upbit was created in October 2017 by Kakao, the company behind South Korea’s dominant messaging application, KakaoTalk, in partnership with Bittrex, a US cryptocurrency exchange.
The reward programme was first announced in March of this year. The company stated that the purpose was to “create a sound cryptocurrency ecosystem” through encouraging the industry to police itself. By the 23rd of that month, 20 schemes had been found and reported to police. Funnily enough, one of the busted schemes was a fake ICO for ‘Kakao Coin’. It was reported at the time that the scheme is to last for a year.
The Upbit reward system is reminiscent of the whistleblower schemes that financial watchdogs have been running in the realm of traditional finance for years. The Securities and Exchange Commission of the US awarded $2.2 million to an individual informant in April, for example.
Another cryptocurrency exchange offering financial rewards to telltales is Binance, the second-biggest such company in the world, originally from China but already expanding to several other countries. Someone tried to hack the exchange in March, and the giant responded by offering $250,000 for information leading to an arrest.
As a further deterrent, the company announced that $10 million has been set aside as a fund to reward future thief-catchers.
Upbit had its offices in Gangnam-gu, Seoul, raided by local police last month. Computers hard-drives were seized because the exchange was suspected of deceiving investors, according to etoday.co.rk. The raid was part of a wider series of police investigations on cryptocurrency exchanges in the country.