Upbit Cryptocurrency Exchange Under Investigation for Fraud in South Korea

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Therefore, in accordance with South Korea's Financial Supervisory Commission (FSC) investigative procedures, the ten investigators went to Upbit's head office in Seoul around 10 pm on Friday and took custody of all the computer systems present in the office In order to audit the exchange's virtual currency holdings. Chosun also reported that the police alleged UPbit of committing fraud by deceiving its investors with an inflated balance sheet.

At that time, the prosecutor stated that the three-day raid took place in South Korea's capital, Seoul. However, being world's 3rd largest and South Korea's biggest cryptocurrency exchanges make it a high profile case.

In a statement posted on its homepage, Upbit confirmed it was being investigated by prosecutors and was cooperating with authorities.

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. In March of this year, local authorities announced an investigation into crypto exchanges' corporate accounts in local banks, citing anti-money laundering (AML) compliance concerns.

"Upbit is now under investigation by prosecutors and is cooperating", the exchange said in a notice to clients, adding that services such as transactions and withdrawals were unaffected and that client assets were safe.


"Upbit services such as all transactions and withdraws are operating normally". The prosecution wanted to investigate about this matter thoroughly. "Your assets are kept securely in your account".

Upbit is now the world's fourth-largest cryptocurrency exchange and the largest in South Korea with a 24-hour trading volume of $1.812 billion at the time of this writing, according to Coinmarketcap.

The move follows revelations last month involving fellow cryptocurrency exchange CoinNest, whose owner Kim Ik-hwan the FSS claims embezzled "billions" of won alongside executives from another operator.

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

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