Upbit, South Korea’s leading crypto exchange, has fallen victim to a fraudulent deposit scam. Following the incident, APT token transactions were stopped.
APT processes stopped
Upbit stopped deposits and withdrawals of Aptos (APT) tokens after discovering that some of them were fake.
It was determined that an unknown account managed to deposit fake coins to the exchange, which Upbit’s systems mistakenly recognized as APT tokens. As a result, fake coins identified as “ClaimAPTGift” were spread across several unspecified accounts.
The information was first made public by “Definalist”, an X account managed by several South Korean crypto traders.
Amazing Korean exchange upbit incident today
1. The Largest S.Korean exchange @Official_Upbit , abruptly halted Aptos' deposits and withdrawals, citing a wallet system maintenance without any specific reason
2. Various Korean users have posted authentication claiming that they… pic.twitter.com/OjfCwhB4eV
— Definalist (@definalist) September 24, 2023
According to Korean web3 news outlet Web3 Builders, Upbit, unsuspecting of the fake deposit, allowed the trading of fake coins with a total value of $3.4 billion, affecting an estimated 100 thousand account holders.
According to the report, it was learned that the exchange tried to correct the situation, reached out to those who exchanged fake currencies and requested their refund.
Upbit, on the other hand, issued a statement suspending APT’s deposit and withdrawal service. The exchange has also reportedly initiated a rigorous process to contact affected users via phone calls, explain the situation, and request the return of the fake coins.
Going forward, Web3 Builders maintained that efforts are ongoing to track down those responsible for fraudulent deposits. It was noted that given South Korea’s strict Know Your Customer (KYC) regulations in the crypto market, criminals are likely to be caught and face charges.
Definalist also shared a possible explanation by the co-founder of the TunaBot chatbot as to how scammers managed to introduce fake APT tokens into the Upbit system.
⚡️How did such a huge and foolish incident occur?
– It seems that during the process of reflecting $APT coin deposits, there was a failure to check the type arguments, and all same functions transfers were recognized as the same APT native token.
– Under normal circumstances,… https://t.co/CvDgTdqnGl pic.twitter.com/8gEx5YnOLH— Definalist (@definalist) September 24, 2023
The brink of disaster was avoided
According to the post on social media, it was stated that an error in the system caused it to recognize every function as the same APT token. This means that any cryptocurrency sent from the Aptos ecosystem to Upbit’s wallet was incorrectly treated as an APT native token.
However, a serious crisis was averted because the fake token had six decimals, as opposed to the eight decimals of the native Aptos token. According to mingbbs’ prediction, if the fake token also used the 8-decimal system, thousands of users would flood the market with inflated APT and cause havoc in the exchange.
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