South Korean lawmaker claims Bithumb exploited users through deceptive practices, generating significant revenue.
Rewritten Article:
Let's dive into the hot issue surrounding South Korean cryptocurrency exchange, Bithumb. A South Korean legislator has accused the platform of employing sneaky tactics known as dark patterns, allegedly charging users higher fees than advertised, according to The Maeil Business Newspaper.
Kim Jae-sup, a People's Power party member, claims Bithumb raked in over 140 billion won (roughly $97.6 million) in extra fees by employing vague methods that tricked users. Bithumb's total fees accumulated between February 2023 and February 2024 amounted to 672.79 billion won, Kim reveals, citing data from the Financial Supervisory Service. While they advertised a competitive commission rate of 0.04%, users were actually charged an average of 0.051%. This discrepancy resulted in an extra fee of approximately 140.91 billion won for users, as Kim points out.
According to Kim, Bithumb neglected to inform users that they needed to register a coupon to secure the minimum fee rate. Such a practice seems suspiciously manipulative, like a deceptive scheme known as a dark pattern, where user interfaces are carefully crafted to deceive users into making decisions they didn't intend to make.
The extra financial burden was more severe on older users, Kim emphasized. "The impact on middle-aged users who may have difficulty understanding or performing the coupon registration process is even more significant," Kim stated. The lawmaker urged regulatory bodies like the Financial Services Commission and the Fair Trade Commission to take decisive action to Put a Stop to this kind of consumer deception.
Despite these allegations, Bithumb managed to bounce back to profitability in 2024, with revenue skyrocketing by 265.4% year-over-year. Bithumb reported an operating profit of 130.7 billion won (approximately $90.1 million) last year, marking a sharp turnaround from losses. The exchange had recorded an operating loss of 14.8 billion won in 2023. The net profit for 2024 surged a whopping 565.8% year-over-year to 161.8 billion won (nearly $111.2 million).
Unfortunately, Bithumb faced a data breach at Korea's largest carrier earlier, which might've further complicated their official dealings.
While specific examples of Bithumb's dark patterns are somewhat scarce in the available results, it's evident that regulators are keeping a close eye on their activities. Common dark patterns in the crypto exchange world include guilt-tripping users, hiding fees, creating a sense of fake urgency, and burying withdrawal options.
If users aren't careful, they could unintentionally lock funds, overpay fees, or miss out on rewards. Deceptive practices can also attract increased scrutiny from regulatory agencies like South Korea's Financial Services Commission. Moreover, allegations of manipulative schemes aren't uncommon in the broader crypto industry.
In South Korea, crypto exchanges face stringent anti-money laundering requirements and must adhere to the Travel Rule, which mandates the sharing of sender/receiver data for transactions over ₩1M (~$750). Punitive measures for deceptive practices can include fines, license revocations, or even criminal charges.
Looking ahead, investors should scrutinize exchange UIs for coercive elements, while regulators may push for standardized disclosures and artificial intelligence-driven fraud detection systems similar to those proposed for memecoins. More detailed case information about Bithumb is hard to come by in existing sources.
- The South Korean legislator, Kim Jae-sup, has accused cryptocurrency exchange Bithumb of employing dark patterns, allegedly charging users higher fees than advertised, with the extra fees amounting to around 140.91 billion won ($97.6 million).
- Regulatory bodies in South Korea, such as the Financial Services Commission and the Fair Trade Commission, are being urged to take decisive action against Bithumb due to their alleged use of dark patterns, which mislead users into making unintended decisions.
- Bithumb's controversial practices, such as hidden fees and guilt-tripping users, are not unique to the exchange, as such deceptive patterns are common in the crypto industry.
- Users need to be cautious on cryptocurrency exchanges like Bithumb to avoid unintentionally overpaying fees, locking funds, or missing out on rewards due to these manipulative schemes.
- South Korean crypto exchanges, including Bithumb, face stringent anti-money laundering requirements and must abide by the Travel Rule, which mandates data sharing for transactions over ₩1M ($750).
- Regulatory agencies in South Korea may push for standardized disclosures and artificial intelligence-driven fraud detection systems to combat deceptive practices in the crypto industry, similar to those proposed for memecoins. Further information about Bithumb's dark patterns can be hard to find in existing sources.
