Upbit, the largest cryptocurrency exchange of South Korea, might soon find itself in great trouble if investigators and local police are able to prove in court that the cryptocurrency exchange committed fraud. The police are accusing Upbit of faking its balance sheets and in the process deceiving quite a significant number of investors.
Investigations into the matter
The police say that the exchange deceived investors by faking its balance sheet. The Financial Supervisory Commission (FSC) of South Korea has entrusted ten investigators with finding out the truth. They will soon be heading to Seoul where they will gain access to Upbit’s computer system, after which they will audit the virtual currency holdings of the exchange.
Several crypto commentators on social media have disclosed that the news is impacting the crypto markets negatively, which they say is evident from the major decline of the top 100 coins. All of them have gone down by almost 15%.
A person well conversant with the latest developments anonymously disclosed that South Korean authorities were suspecting that Upbit was illicitly transferring customer funds into the accounts of its top executives.
Handling the matter
Upbit is one of the first crypto exchanges to draw the attention of Korean authorities this spring. The FSC and the Korean Financial Intelligence Unit (KoFIU) recently pronounced a joint investigation into the corporate accounts in Korean banks of the crypto exchange.
A number of market observers have criticized the suspicious transfer of funds from the Upbit cryptocurrency exchange to the Upbit executives’ personal accounts. The cryptocurrency community in South Korea has given its views in relation to the matter. It has said that it won’t support the executives that will found guilty of the crime.
If all goes according to plan, the local police might soon present its finalized report on the situation. The South Korean authorities intend to shut down the exchange in case it is sufficiently proven that it was guilty of the crime.
It has been reported that in the past 24 hours, Upbeat has managed to host about $1.6 billion (£1.17bn) of cryptocurrency trades. That implies that it is currently the largest in Korea. It was in April that Kim Ik-hwan, who happens to be a co-founder, as well as the serving chief executive CoinNest, was found guilty of fraud and embezzlement of funds. He is said to have transferred billions of digital assets belonging to customers to the accounts of some top executives.
Prime Minister, Lee Nak-yon, is one of the officials that have been alarmed by the rapid rise being experienced in the cryptocurrency market. He reserves fears that a significant number of youths in the nation might be corrupt. The government has said that it will do all within its means to curb illegal activities such as money laundering. A major decline in trading prices is being witnessed and some people attribute it to the imposed restrictions.