South Korea's FSS issues consumer alert over fake chain posing as Dunamu's GIWA network
In short
South Korea's Financial Supervisory Service (FSS) issued a consumer alert on 22 October over fraud using a fake blockchain that imitated GIWA, a network being developed by Dunamu. Yonhap and Newsis reported that a fraud group took about 2.8 billion won, a case raised at the FSS audit on 19 October.
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South Korea's Financial Supervisory Service (FSS) issued a consumer alert at the "caution" level on 22 October over fraud using a fake blockchain that imitated GIWA, a network being developed by Dunamu. Dunamu is the operator of the crypto exchange Upbit, Asia Economy reported. The FSS said the alert aims to prevent further harm from new on-chain fraud methods. [ 1 , 2 , 3 ]
According to the FSS, as reported by Newsis, the scammers spread false claims on social media and online communities that a blockchain mainnet had launched, although the developer had made no official announcement. Asia Economy said this happened before GIWA was officially launched. The group then built a fake network resembling the official one and induced users to move crypto assets to it. [ 1 , 2 ]
GIWA's official chain ID is 91342, while the fake network used 9134. Newsis said the scammers dropped the last digit. Newsis reported that the overseas decentralised exchange DYOR Swap mistook the fake network for the real GIWA network and supported it. Users then sent Ethereum to the fake network, and the scammers withdrew it all at once. Yonhap described the deposits as going through a fake network bridge, which it defined as a device for moving crypto assets between blockchains. [ 1 , 2 , 3 ]
Yonhap reported that the FSS action followed the 19 October audit of the FSS, at which the case was raised and the sum taken was put at about 2.8 billion won. Newsis said Democratic Party lawmaker Min Byung-deok raised the case at the National Assembly Political Affairs Committee audit. He urged stronger supervision of crypto fraud, including dedicated blockchain forensics staff and supervisory standards for large exchanges' blockchain networks. FSS Governor Lee Chan-jin responded positively, Newsis said. [ 2 , 3 ]
The FSS told users to confirm whether a new network has officially launched and where the information comes from. Yonhap quoted the FSS as saying that bridges or smart contracts supporting a mainnet that is not yet launched or still in development are "100% fraud". Marketing such as "surprise launch" and "airdrop" calls for caution, the FSS said, and Asia Economy described such promotions, when not posted on the developer's official account, as typical scam methods. The FSS also said decentralised exchanges have no central operator, so redress is hard if fraud occurs. [ 1 , 2 , 3 ]
The FSS said it will ask crypto businesses planning new blockchains to announce their development progress and give related cautions. An FSS official told Asia Economy the agency will work to protect users from crypto fraud. [ 1 , 2 , 3 ]
Why it matters
The FSS said on-chain crypto fraud is completed within minutes to hours and that recovering losses is very difficult. It said it will ask crypto businesses planning new blockchains to announce their development progress and give users cautions.
Key facts
- The FSS issued a consumer alert at the "caution" level on 22 October over fraud using a fake chain that imitated Dunamu's GIWA network. [ 2 , 3 ]
- Scammers lured investors on social media and online communities with false claims that a mainnet had launched. [ 1 , 2 , 3 ]
- GIWA's official chain ID is 91342, while the fake network used 9134. [ 1 , 2 , 3 ]
- The decentralised exchange DYOR Swap mistook the fake network for the real one; users sent Ethereum to the fake network, and the scammers withdrew it. [ 1 , 2 ]
- Yonhap and Newsis put the amount taken at about 2.8 billion won; the case was raised at the FSS parliamentary audit on 19 October. [ 2 , 3 ]
- The FSS said it will ask crypto businesses planning new blockchains to announce development progress and give related cautions. [ 1 , 2 , 3 ]
Confirmed by several sources
- The FSS issued a consumer alert over scammers using a fake chain posing as Dunamu's GIWA network. [ 1 , 2 , 3 ]
- The official GIWA chain ID is 91342 and the fake network used 9134. [ 1 , 2 , 3 ]
- The FSS advised users to be wary of promotions such as "surprise launch" and "airdrop", and warned that redress is hard on decentralised exchanges. [ 1 , 2 , 3 ]
- The FSS advised users to check whether a network has officially launched and where the information comes from. [ 1 , 2 ]
Still unclear
- How much was lost in total. Yonhap and Newsis cite about 2.8 billion won from the 19 October audit; Asia Economy gives no figure.
- Whether any of the stolen funds can be recovered. The FSS said redress on decentralised exchanges is difficult; the documents do not report any recovery.
- Who ran the scam. The documents refer only to a fraud group and do not identify anyone.