Angry crypto trader loses money, tries to burn down exchange office

Police responded to calls about a crypto trader pouring lighter fuel and threatening to set alight Upbit's support offices in Seoul last week.

South Korean police arrested a 40-year-old crypto trader in Gangnam last Thursday for the attempted arson of an exchange’s customer service center, reports Korea Joon Ang Daily.

Police responded to calls about a man pouring lighter fuel and threatening to set alight Upbit’s flagship support offices in the South Korean capital.

The unnamed individual told authorities he was upset after losing money with the cryptocurrency exchange.

Contrary to other reports, police say he was only trying to set fire to the building and not himself.

Local media initially reported the man had dowsed himself with a flammable substance, threatening to burn both himself and Upbit’s building.

“It was determined that some of the flammable substances that were sprayed on the floor at the scene splashed on the body, and that it was not directly sprayed on the body,” said a police official via The Hankyoreh (automatically translated).

Police are now investigating his exact motive.

Crypto traders frustrated by support bottlenecks

Last month, Upbit reopened its in-person customer service center in southern Seoul after a long closure due to the pandemic.

The so called “Upbit Lounge” was established to help customers struggling with Know-Your-Customer (KYC) rules.

Upbit has experienced an influx of users following the forced closure of many smaller cryptocurrency exchanges. It currently handles more than $6 billion daily trading volume — accounting for about three quarters of South Korea’s spot crypto trade.

In September, South Korea went from more than sixty to just four cryptocurrency exchanges — Upbit, Bithumb, Coinone, and Korbit.

Only the largest were able to survive the implementation of a new law intended to tackle illicit activity.

Per the country’s new anti-money laundering rules, exchanges must partner with recognized banks and ensure every crypto trader has a corresponding bank account in their real name.

Exchanges unable to meet the new rules were simply forced to close, with their users generally headed for the nation’s top four platforms.

South Korean crypto exchanges long grappled with the new laws, but most still failed to meet the strict requirements.

[Read more: Korea teachers’ union denies crypto media reports, will ‘never have’ Bitcoin ETF plan]

According Korea Joon Ang Daily, public relations between the remaining crypto exchanges and their traders is strained.

Kim Hyeong-jung, a professor of information security at Korea University, explained that many crypto investors have been burned due to the bottleneck.    

“As Upbit’s customers exponentially grew when the small exchanges closed, verification processes such as KYC rules to check client identities, was rushed and not properly carried out,” said Kim Hyeong-jung.
“In the end, the ordinary investors are the ones who suffer the most harm, but these people have no one to blame but themselves, even if it is not directly their fault.”

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