A spate of fake exchanges are engaged in the unauthorized trade name use of Binance, which is the world’s top cryptocurrency exchange desk. Key examples are Binance Korea and Binance Pay.
Binance, originally founded in China, announced plans to enter the Korean market sometime early next year. Investors got excited as the company showed signs of preparation, including hiring Koreans.
However, as much as the company sees Korea as “a promising market,” Binance made it clear that it is taking prudent steps in setting up an office in Korea. The plan is to get the office up and running by sometime next year.
However, there already are companies in Korea that have been using the trade name “Binance,” illegally since March, pretending to be the official Korean office of Binance – namely, Binance Korea and Binance Pay.
◆ Fake Apps use the same CI designs that appear like the real thing – Downloaded by 100 users
A DailyToken investigation found out that Binance Korea is currently attracting investors with its exchange desk, also named Binance Korea. On August 30th, after typing in “Binance” in Korean into the mobile app store, DailyToken was able to confirm that the Binance Korea app appeared right below the official Binance app.
The app launched on July 26th, and has had 100 downloads since. As it uses the same CI (Corporate Identity) design officially distributed by Binance, it is easy to mistake it for the real thing.
Amidst such fake companies that falsely assume the company name of Binance, a lot of fraudulent channels are popping up like mushrooms on social media such as Telegram.
“Binance Koreans” and “Binance Korea” are some examples that use close to identical names to Binance’s official Telegram group, “Binance Korean.”
◆ Binance Korea and Binance Pay share a complicated management structure – Situated in the same building
So then, are Binance Korea and Binance related? According to the Certified Copy of Corporate Registration, Binance Korea’s address is on the third floor of a building located in Nonhyun-dong, Gangnam-gu, Seoul.
The sixth floor of the same building is occupied by Binance Pay. Moreover, H, the current CEO of Binance Pay, stepped down as the executive director of Binance Korea in June. All of this clearly shows that there is a close connection between the two companies.
What’s more is that the building is also occupied by a company named Family Fintech, a cryptocurrency payment device manufacturer, whose CEO is S, also the executive director of Binance Pay. In short, the management of Binance Korea, Binance Pay and Family Fintech are all related to one another.
The front door on the first floor of the building, which was equipped with a door intercom, was tightly shut when we paid a visit. The only unit that answered to the doorbell was the one on the fifth floor, the floor believed to be used by Family Fintech.
When we explained that “We are looking for Binance Korea and Binance Pay,” the person who introduced himself as “an employee working on the fifth floor” replied “There is no company with the name Binance Korea in this building.”
“Our company rented the entire building, and I cannot tell you the name of the company,” added the man, disconnecting the intercom call.
After a long wait and finally making it into the building, we were met by a third floor office representative, who raised his voice saying, “Although there is an office in this building, Binance Korea is located elsewhere. I cannot answer any further questions.”
When asked whether this building was used by Binance Korea or which company he belonged to, he forced us out saying, “Please leave our office.”
◆ Binance keeping a close watch saying, “The use of the same logo can become a problem.”
Binance is aware of the existence of Binance Korea and Binance Pay, and is keeping a close eye on them. “There has not been any registered cases of fraud victims yet, but investors do ask us whether we opened an office in Korea saying ‘Binance finally launched in Korea,’” said a representative from Binance.
“However, some investors do believe that the fake company has actually been set up by Binance. Such fake exchange platforms are currently reported as ‘Harmful Sites’ on Google.”
“If these corporate identity scams continue, they will spark various problems including investors falling victim to scams and trademarks being infringed,” explained the representative.
“In the case of Binance Korea, the fact that they copied Binance’s existing CI and app designs in their website and app can be a problem,” said Kang Sung-sin, Attorney at Law in Haenae Law Firm.
“Aside from Binance Korea’s act of using a pirate trademark in pursuit of making profits out of Korean users, Binance can hold Binance Korea legally liable for using its trademark, if Binance has already made trademark applications in Korea for its CI design,” he said, adding “Binance can also hold Binance Korea legally accountable for copyright infringements with regards to stealing Binance’s CI and website designs.”
“However, legal disputes between the two parties may arise going forward due to the possibility that Binance Korea may be subject to its trade name protection under the Korean Commercial Act, since it already completed its Corporate Registration in Korea,” he said.
Translated by Cha Soo-jin