South Korea Accuses DeepSeek of Unlawful Data Transfers Amid AI Expansion

Chinese artificial intelligence startup DeepSeek has come under intense scrutiny from South Korean authorities for allegedly transferring user data and AI prompts without proper consent. The controversy erupted after Korea’s data protection authority, the Personal Information Protection Commission (PIPC), released a detailed statement on April 18, 2025, accusing Hangzhou DeepSeek Artificial Intelligence Co. Ltd. of bypassing user permissions during its South Korean launch in January. 

According to the PIPC, when the DeepSeek app was still available in the Korean app market, the company transmitted personal information and user-entered AI prompts to entities in both China and the United States without obtaining prior user consent. These actions directly violated South Korea’s stringent privacy laws and have led to the suspension of the app’s downloads within the country since February 2025. 

The DeepSeek User Data Controversy

The Commission further revealed that content input by users into the AI system was being shared with Beijing Volcano Engine Technology Co. Ltd., along with data about users’ devices, networks, and application usage. DeepSeek later responded that this data transfer was intended to enhance the user experience, and stated it halted the practice as of April 10. However, the damage had already been done, and questions around data security and ethical use of artificial intelligence were raised globally, reported Reuters.

The Cyber Express reached out to DeepSeek to learn more about the situation. However, at the time of writing this, no official statement or response has been shared addressing the data privacy violations. 

DeepSeek’s Meteoric Rise and the Fallout

Founded in 2023, DeepSeek rapidly became a disruptive force in the AI landscape. It claimed that its models—including DeepSeek-V3, DeepSeek-R1, and Janus-Pro—could rival industry giants like OpenAI and Stability AI, but at a fraction of the cost and energy consumption. In January, DeepSeek’s app soared to the top of Apple’s App Store rankings in the U.S., surpassing even ChatGPT. 

The company submitted a paper to arXiv asserting that its DeepSeek-R1 model delivered reasoning capabilities comparable to OpenAI’s proprietary offerings. These claims, while still unverified, have been deemed “plausible” by at least one independent researcher. 

Following its breakout performance, DeepSeek alleged that it was targeted by “large-scale malicious attacks,” which coincided with a sharp decline in shares of leading AI chip providers like NVIDIA and Broadcom. NVIDIA alone recorded a staggering $589 million market cap loss in a single day. 

DeepSeek’s Popularity Exploited by Cybercriminals

With its rapid success, DeepSeek has also attracted the attention of cybercriminals. Cybersecurity firm Cyble reported a surge in phishing, malware, and investment scams leveraging the company’s name and reputation. Their research division, Cyble Research and Intelligence Labs (CRIL), identified multiple fraudulent domains impersonating DeepSeek: 

• abs-register[.]com
• deep-whitelist[.]com
• deepseek-ai[.]cloud
• deepseek[.]boats
• deepseek-shares[.]com
• deepseek-aiassistant[.]com
• usadeepseek[.]com

These websites were found to host deceptive QR code-based phishing schemes designed to steal cryptocurrency and personal data. In some instances, users were tricked into scanning QR codes that compromised their wallets by mimicking legitimate wallet connection interfaces. 

A particularly concerning site, deepseek-shares[.]com, falsely claimed to offer pre-IPO shares in DeepSeek—despite the company being privately held and having made no announcements regarding an IPO. Cyble warned that these fake investment sites are particularly dangerous due to their ability to exploit the hype surrounding DeepSeek. 

International Backlash and Security Concerns

Beyond South Korea, DeepSeek has faced international backlash. Taiwan’s Ministry of Digital Affairs banned the use of the DeepSeek AI chatbot in the public sector in February. The ban came after the chatbot responded to politically sensitive questions, such as “Is Taiwan a country?” by aligning with China’s official stance, causing concern over potential political bias. 

The ban extended to government agencies, public schools, and critical infrastructure, citing risks associated with cross-border data transmission. Radio Free Asia also reported on the ban, highlighting Taiwan’s efforts to safeguard national information security. 

In the U.S., agencies such as the U.S. Navy, NASA, and congressional offices have reportedly advised against using DeepSeek, citing national security risks due to the AI’s overseas data storage. Japanese officials, including legislator Itsunori Onodera, also voiced concerns after DeepSeek’s responses aligned with Chinese territorial claims in disputed regions. 

Conclusion

DeepSeek’s rise reflects a larger trend in artificial intelligence—fast-paced innovation accompanied by growing concerns over privacy, ethics, and cybersecurity. The DeepSeek app continues to be under intense scrutiny, and the company’s future may hinge on how quickly it can address its security flaws and regain trust. 

This is an ongoing story, and The Cyber Express will be closely monitoring the situation. We’ll update this post once we have more information on the data privacy controversy or any official statement from the company.