Dunamu’s Upbit battles fraud with AI-driven detection system

Upbit aims to lead investment in the virtual asset market. [UPBIT]

Upbit, a Korean cryptocurrency exchange operated by Dunamu, has been successfully contributing to the prevention of financial fraud through its own Fraud Detection System (FDS).

Its FDS comprehensively analyzes a range of data including access information and transaction history to detect and block abnormal transactions such as electronic communication financial fraud, often referred to as phishing.

Upbit consistently improves its FDS alongside its withdrawal and deposit monitoring systems, proactively averting issues. So far, Upbit's FDS has prevented the loss of 25 billion won ($18.5 million) from malicious approaches.

As the virtual asset investor population grows, a corresponding increase is observed in novel types of crimes linked to them.

According to the Financial Security Institute, the total amount of voice phishing damages reached 145.1 billion won in 2022, with a notable increasing trend in damages related to internet bank accounts.

Considering virtual asset crimes potentially happen at any time, it is crucial to establish an effective prevention system.

Upbit's FDS stands out by continuously evolving with AI technology. Unlike conventional systems that rely on fixed rules like transaction thresholds, the new FDS updates its detection criteria through machine learning.

It analyzes a vast amount of data from criminal cases, user information and transaction patterns to create simulation models. The insights gained from these simulations serve as references for detecting abnormal transactions, thereby enabling the detection of new types of anomalies.

It also automatically learns all evasion behaviors observed after detecting abnormal transactions.

In particular, SIM swapping, a novel crime involving the theft of a user's information and virtual assets through the duplication of a Subscriber Identification Module card, often referred to as a USIM card, has been on the rise.

These new scams can target cell phone users even while they sleep, making Upbit crucial in proactively detecting and preventing emerging crimes like SIM swapping through its intelligent FDS system equipped with AI.

Solidifying its reputation as a reliable virtual asset exchange, Upbit has also been ranked first among domestic exchanges and tenth globally out of 128 digital asset exchanges around the world. It is also the only domestic exchange to receive A grade, according to a benchmark ranking by U.K. blockchain analytics firm CryptoCompare.

Upbit has also been offering a comprehensive investor protection system, which includes a 24-hour telephone helpline for voice phishing victims and free psychological consultations provided by the Upbit Investment Protection Center for those who have been victims of virtual asset-related crimes.

“In addition to our advanced FDS, our team is making efforts to combat evolving virtual asset crimes, including having the largest number of anti-money laundering personnel in the industry,” said an official from Dunamu, the operator of Upbit.

BY KIM SU-HYEON [kim.suhyeon4@joongang.co.kr]