The Bank of Korea says it is taking a “cautious approach” to potentially including Bitcoin as a foreign exchange reserve.

Officials from the Korean central bank said in a March 16 response to a written inquiry that they have not looked into a potential Bitcoin (BTC) reserve, citing high volatility. 

Responding to a question from Representative Cha Gyu-geun of the National Assembly’s Planning and Finance Committee, central bankers said that they have “neither discussed nor reviewed the possible inclusion of Bitcoin in foreign exchange reserves, adding that “a cautious approach is needed,” according to the Korea Herald.

“Bitcoin’s price volatility is very high,” the central bank noted, before adding that “in the case of cryptocurrency market instability, transaction costs to cash out Bitcoins could rise drastically.”

Over the past 30 days, Bitcoin prices have swung wildly between $98,000 and $76,000 before settling at current levels of around $83,000 in a 15% decline since Feb. 16, according to CoinGecko. 

The decision comes amid increasing global discussions on the role of crypto assets in national financial strategies, sparked by US President Donald Trump’s executive order earlier this month establishing a strategic Bitcoin reserve and digital asset stockpile.  

At a seminar on March 6, crypto industry lobbyists, and some members of Korea’s Democratic Party urged the country to integrate Bitcoin into its national reserves and develop a won-backed stablecoin. 

However, the Bank of Korea emphasized that its foreign exchange reserves must have liquidity and be immediately usable when needed, as well as a credit rating of investment grade or higher, criteria that Bitcoin does not meet, in its opinion. 

Professor Yang Jun-seok of Catholic University of Korea concurred, stating “it is appropriate for foreign exchange to be held in proportion to the currencies of countries with which we trade,”

Professor Kang Tae-soo from the KAIST Graduate School of Finance commented on the US being likely to leverage stablecoins rather than BTC to maintain dollar hegemony before adding, “Whether the IMF will recognize stablecoins as foreign exchange reserves in the future is important.”

Related: Democrat lawmaker urges Treasury to cease Trump’s Bitcoin reserve plans

Earlier this month, South Korea’s financial regulator examined the Japanese Financial Services Agency’s legislative trend toward crypto assets as it mulls lifting a ban on crypto exchange-traded funds in the country.

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Crypto users have reported a rise in scam emails made to look like they’re from crypto exchanges Coinbase and Gemini that attempt to get users to set up a new wallet with pre-generated recovery phrases controlled by scammers.

In several examples posted to X, the email claims to be from Coinbase, asking users to transition to self-custodial wallets and providing instructions on downloading the legitimate Coinbase Wallet, giving a deadline of April 1 to make the switch.

Source: Steve Kaczynski

However, it also provides pre-generated recovery phrases. Once users open a new wallet with those phrases and transfer funds, all the assets will be available to the threat actor, who could drain the wallet.

The email mentions a class-action lawsuit against Coinbase alleging it has sold unregistered securities, which has resulted in a court mandating users manage their own wallets.

“Coinbase will operate as a registered broker, allowing purchases, but all assets must move to Coinbase Wallet,” the phony email says.

The US Securities and Exchange Commission dismissed its lawsuit alleging Coinbase was an unregistered broker and selling unregistered securities on Feb. 27.

Coinbase told Cointelegraph it is aware of the scam and pointed to its March 14 post to X, saying, “We will never send you a recovery phrase, and you should never enter a recovery phrase given to you by someone else.” 

Source: Coinbase Support 

Crypto exchange Gemini has also been spoofed with the same recovery phrase email scam, using the same tactics and claiming users need to set up a new wallet because of a recent court decision.

Gemini was being sued by the SEC for allegedly offering unregistered securities through its earn program. The regulator opted to end the legal action on Feb. 26.

Source: Sukesh Tedla

Gemini didn’t immediately respond to Cointelegraph’s request for comment. 

Blockchain security firm CertiK’s annual Web3 security report flagged crypto phishing attacks, which cost users $1 billion across 296 incidents, as the most significant security threat for 2024.

Related: California financial regulator warns of 7 new types of crypto, AI scams

The email scams come as at least three crypto founders have reported foiling an attempt from alleged North Korean hackers to steal sensitive data through fake Zoom calls.

Scammers have been targeting crypto founders by offering a meeting to discuss a partnership opportunity, but once the call starts, they send a message feigning audio issues and a link to a new call that installs malware. 

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Crypto platform Debiex has been ordered to pay around $2.5 million after it failed to respond to a US Commodity Futures Trading Commission suit accusing it of being a romance scam ring.

Arizona federal court Judge Douglas Rayes on March 13 granted the CFTC’s earlier motion for summary judgment in its case and ordered Debiex to pay back around $2.26 million it stole from its customers, along with a civil penalty of nearly $221,500.

Judge Rayes said there was no evidence that Debiex’s failure to respond to the CFTC was the result of “excusable neglect.”

The CFTC sued Debiex in January 2024, saying its staff ran a so-called “pig butchering” scam, where they initiated romantic relationships with customers over social media to gain trust to convince them to invest in the platform.

The scheme hooked five victims who deposited around $2.3 million in total onto Debiex, which the purported trading platform stole, the CFTC said.

A highlighted excerpt of Judge Rayes’ order summarizing the CFTC’s case against Debiex, Source: CourtListener

The CFTC also accused Zhāng Chéng Yáng of being a “money mule” for Debiex, whose crypto wallets were used to accept and steal victims’ funds.

Judge Rayes granted a CFTC motion for default judgment against Zhāng on March 12, finding it adequately alleged he controls a crypto wallet with OKX “that received digital assets to which he had no legitimate claim.”

He said OKX was “voluntarily preserving” the crypto in Zhāng’s account and ordered its contents, consisting of $5.70 worth of Tether (USDT) and nearly 63 Ether (ETH) worth around $119,500, to be transferred to an unnamed victim.

The CFTC said in its January 2024 complaint that Debiex’s scheme saw its unknown managers target potential victims through social media to lure them to websites it had created marketing itself as a “Blockchain Network Decentralized perpetual contract trading platform” where users can conduct futures trading and “Mining transactions.”

Related: Four suspects charged in home invasion of streamer Amouranth 

Debiex’s staff would present as females and built a rapport with victims through “continuous and repeated messaging and sharing purported pictures of themselves” while claiming to be “highly successful digital asset commodities traders,” the CFTC said.

Once an account was created and the customers sent over their crypto, the CFTC said Debiex would share “fictitious information” about customer balances, trading positions and profits.

“All of this information was most likely false,” the CFTC said. “The evidence shows that the Customers’ digital assets were simply sent to numerous digital asset wallets in an attempt to obfuscate their destination.”

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