South Korea’s Largest Crypto Exchange Upbit Raided By Authorities

Crime, News | May 11, 2018 By:

South Korean cryptocurrency exchange Upbit was reportedly raided by local police and ten prosecutors on suspicion of fraud.

According to local news outlet Chosun, authorities searched Upbit’s offices in the Gangnam-gu district on Thursday and Friday. The exchange is suspected of fraud for allegedly faking its balance sheets and deceiving investors.

“They are suspected of falsifying records to appear as though they are holding more cryptocurrency than they actually possess,” the Prosecutors’ Office of the southern district of Seoul. “We have secured hard disks and accounting books through confiscation. Analysis is expected to take days.”

Upbit confirmed the investigation in a note posted on its support website and said that its services are still operational.

“UPbit is currently under investigation by the prosecution, and we are working diligently,” the exchange said. “UPbit services, such as all transactions and withdrawals, are operating normally. Your assets are kept securely in your account, so you can rest assured that you can use UPbit services.”

Upbit, which is backed by South Korean chat giant Kakao, is the fourth-largest cryptocurrency exchange in the world by 24-hour trade volume. As soon as the news broke out, Upbit users withdrew large amounts of cryptocurrencies, causing the market to dip.

South Korea has been cracking down on the crypto industry to combat excessive speculation and illegal activities. 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.

Last month, South Korean police arrested Kim Ik-hwan, co-founder and CEO of cryptocurrency exchange Coinnest, for allegedly embezzling funds belonging to customers.