Millions of people in South Korea use “honeycomb accounts”, and the loss of funds is the biggest hidden danger

"Beehive accounts" have sparked heated discussions in South Korea. Hive accounts refer to complex asylum accounts that are operated by small cryptocurrency exchanges to mask the identity of individual traders.

Due to the booming financial services industry in Korea, there are approximately 205 cryptocurrency exchanges in the country, serving the Korean population of 52 million.

Crypto

In January 2018, South Korea banned the use of anonymous bank accounts for fear that cryptocurrencies might be used for money laundering and other illegal programs. But in the past 18 months, the number of small cryptocurrency exchanges that provide investors with a honeycomb account has soared. The Hive Account manages the investor's funds through the exchange's own corporate bank account, thereby masking the information of potential investors.

So why is the government not banned the hive account? They have not tried it, but in October last year, a South Korean court ruled that it was unreasonable to require a cryptocurrency exchange to close a corporate account. Since then, a large number of new exchanges have flooded the market, using various activities to attract potential traders (they initially suspected that their funds went into the hive account and could easily withdraw the funds).

At the same time, Korean authorities are increasingly concerned that these smaller exchanges may be particularly vulnerable to cyber attacks and fraud.

In May of this year, the Upbit exchange suffered a phishing scam. Last year, Bitmumb lost $31 million due to hacking. It is reported that some of these attacks are from North Korea. Due to international sanctions, North Korea urgently needs to obtain funds through password stealing.

However, according to local media reports in South Korea, only five exchanges have so far strengthened security protection measures in accordance with the requirements of the regulatory authorities. There is a bill proposed to strengthen the cyber security rules of all exchanges, but has not yet been approved. At the same time, more and more Koreans are heading straight to the hive account.

We will continue to update Blocking; if you have any questions or suggestions, please contact us!

Share:

Was this article helpful?

93 out of 132 found this helpful

Discover more

Blockchain

Written on Binance's 6th anniversary: Will there be a warm spring after the crypto winter?

Binance will celebrate its sixth anniversary tomorrow, but looking back on the past year, the road has not been smoot...

Blockchain

Introducing two new NFTs launched this week: Ether and Azuki Elementals.

The secondary market trading volume and weekly active traders of NFT have reached the lowest point this year. Howeve...

Market

Bull market signal? How long will Bitcoin stay above $30,000?

The current price of Bitcoin is at the midpoint of the 2021-2022 cycle, at $30,000. Several indicators of Bitcoin are...

Finance

Interpreting Injective (INJ): A comprehensive evaluation of DeFi project based on SWOT

Researcher Andrey Didovskiy will conduct a SWOT analysis on Injective (INJ), a blockchain built specifically for DEFI...

Blockchain

Annual summary of NFT weekly report 丨 combinability of NFT and virtual time and space set

Satoshi Masamoto: 5 daily high-quality articles on cryptocurrencies Today's content includes: 1 NFT composabilit...

News

10 Ways NFTs are Boosting the African Tourism Industry

NFTs provide a unique opportunity to document and showcase various aspects of African cultural heritage. They also pr...