Upbit, renowned as South Korea’s largest crypto exchange, is making headlines today for a different reason that we’re used to. Much to our surprise, reports of alleged fraud are currently being investigated by local police, and news outlets such as Chosun have been among the first to cover the story.
According to reports by Chosun, the police believe that the digital asset exchange has managed to fake its balance sheets, in the process deceiving millions of investors worldwide. Upbit, known globally as the fourth largest crypto exchange by 24-hour trade volume, has attracted the attention of the South Korean Financial Supervisory Commission (FSC), who reportedly sent ten investigators to the exchange’s head offices in Seoul around the early hours of this morning.
The primary aim is to access the company’s central computer system in order to audit the virtual currency holdings and either clear up the exchange’s name or take legal action. Despite a decision not having yet been made, a large number of crypto commentators have taken to social media and suggested that the news will cause the market to fluctuate significantly.
And they would be correct, as the devastating impacts have already been seen in the crypto market, with many of the top 100 altcoins having gone down by around 10% since this morning.
History repeats itself, and Upbit isn’t the first crypto exchange on the list to have attracted the attention of the South Korean authorities. 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.
Even more recently, the major crypto exchange known as CoinNest had its chief executive and co-founder detained on charges of fraud and embezzlement, shocking the entire online community and creating dips in the market as well. Apparently, the two are accused of moving more than a few billion Won from their customer’s accounts and into their own personal banks.
Plus, more than 12 cryptocurrency exchanges have also been asked to tighten customer protection. By comparing the situation of cryptos yesterday with today, we can see that Bitcoin is currently trading at approximately $8,526, down about 8%, while Ethereum is down almost 10%, humble but standing, at around $678.