Upbit in Chaos: $3.4 Billion Fake Coin Scare

After a fraudulent deposit, Upbit, South Korea’s premier cryptocurrency exchange, descended into chaos.

After detecting counterfeit Aptos (APT) tokens, Upbit ceased accepting deposits and withdrawals on September 24.

The exchange received counterfeit currencies that Upbit mistakenly designated as APT tokens from an unknown source.

Thus, multiple unnamed accounts received fraudulent “ClaimAPTGift” coins.

The X account “Definalist,” controlled by numerous South Korean cryptocurrency dealers, disclosed the truth.

This event was followed by confusion.

According to the Korean web3 news portal Web3 Builders, Upbit, oblivious to the fraudulent deposit, permitted the trade of $3.4 billion in counterfeit coins, affecting an estimated 100,000 account holders.

According to the article, the exchange is scrambling to remedy the situation by contacting traders who exchanged fake currency for their returns.

After the incident, Upbit suspended APT deposits and withdrawals.

Additionally, the exchange has contacted affected users to explain the issue and request counterfeit currency.

Web3 Builders claims to be searching for those who deposit fraudulent coins.

South Korea’s stringent KYC regulations for the crypto market make it probable that the perpetrators will be apprehended and charged.

Definalist reported that a co-founder of the TunaBot chatbot may have explained how the fraudsters obtained the fake APT tokens in Upbit.

The co-founder, @mingmingbbs, attributed the APT token deposit issue to a technical error.

Due to a mistake, all functions were treated with the same APT token.

Any Aptos coins delivered to Upbit’s wallet were misidentified as APT.

Unlike the native Aptos token, the six decimals of the counterfeit token prevented a significant catastrophe.

According to @mingmingbbs, if the fake token had employed the 8-decimal scheme, thousands of individuals would have flooded the market with the inflated APT, causing exchange pandemonium.