Upbit Raided by Authorities Under Suspicion of Fraud

13 May, 2018, 09:20 | Author: Julio Duncan
  • Korean Crypto Exchange Upbit Raided Amid Suspicions of Fraud

One of South Korea's largest cryptocurrency company Upbit is under an investigation from the police and ten other different investigators sent from the country's Financial Supervisory Service for its alleged role in a financial fraud.

The Seoul Southern District Prosecutors' Office raided the office of Upbit in Gangnam District, southern Seoul, and confiscated computer hard drives and account books.

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

The raid is related to suspicions that the exchange has been allowing trades in currencies that it doesn't actually hold, thus deceiving its customers.

Upbit, a subsidiary of Korean tech giant Kakao is now the fourth largest crypto exchange globally by 24-hour trade volume.

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.


"A statement was posted on the exchange's website today to inform customers that "[Upbit] is now under investigation", but that "services such as all transactions and withdrawals are operating normally" and "assets are kept securely in your account, so you can rest assured that you can use [Upbit's] services".

"Upbit services such as all transactions and withdraws are operating normally. Your assets are kept securely in your account, so you can rest assured that you can use UPbit services".

Upbit is the largest cryptocurrency exchange in South Korea and the fourth largest in the world. Back in March, Cointelegraph reported that the Korean Financial Intelligence Unit (KoFIU) and the FSC were launching a joint investigation into the corporate accounts of certain Korean banks in an attempt to minimize and potentially eliminate money-laundering schemes. CoinNest's CEO and co-founder Kim Ik-hwan was among those arrested and charged.

Korean authorities have been actively monitoring and investigating domestic cryptocurrency exchanges to prepare for a fully regulated industry and to reduce potential risks to traders.

As for the selling, there is also talk of a sale of 8200 Bitcoin from the Mt. Gox wallet.

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