Korean prosectors raid cryptocurrency exchange offices

Calvin Saunders
May 13, 2018

Upbit, South Korea's largest cryptocurrency exchange-and the world's fourth largest, has been invaded by investigators following accusations of falsifying balance sheets to deceive investors. The awful sentiment seems to be a reaction to reports that South Korea's exchange Upbit is suspected of fraud.

The widespread declines took place after reports that authorities raided South Korean UPbit.

This latest suspected fraud comes at a time of increased scrutiny in South Korea and Asia in general.

Upbit is one of the largest crypto exchanges in the world, supporting a great variety of cryptocoins across more than 250 trading pairs.

Upbit exchange officially announced on its platform that it is undergoing investigation, though services are allegedly operating normally.

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According to CoinDesk in Korea, investigators are from the Prosecutor's Office of the southern district of Seoul and they searched the head office of the exchange on May 10 and 11.

The general reaction from the cryptocurrency community in South Korea and the global cryptocurrency space has been that UPBit executives should not have had the motivation to commit such crimes given that cryptocurrency exchanges have generated hundreds of millions of dollars in profits on a quarterly basis since early 2017. "Your assets are kept securely in your account, so you can rest assured that you can use UPbit services".

In the afternoon, when the news of raid entered the market, Upbit has been at the 4th spot in the top cryptocurrency exchanges with a 24-hour trading volume of $1.8 billion as per Coinmarketcap. According to the prosecution, the Hankyoreh described, "Upbit has been suspected of carrying out "book-trading" without holding virtual currencies in a wallet". Their first target was Coinnest where the chairman, Kim Ik-hwan, was over embezzlement and fraud charges. Anonymous sources told Neuner that the investigation revealed a liquidity issue between exchanges in the local market, which ultimately led the authorities to believe UPbit initiated an unauthorized reallocation of client funds.

There was also speculation that the trustee of failed exchange Mt. Gox was selling its Bitcoin to pay back creditors.

Other reports by MaliBehiribAe

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