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Upbit Raided by Authorities Under Suspicion of Fraud

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South Korean authorities have raided the world’s fourth-largest crypto exchange, on suspicion of fraudulent activity. Upbit is the largest exchange in Korea, so this raid will inevitably send shockwaves through the crypto industry in East Asia.

Defrauding its Own Customers

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. The prosecution statement had the follow to say:

Upbit has been suspected of carrying out ‘book-trading’ without holding virtual currencies in a wallet. After the digital forensics investigation on the seizures and confirming the illegal charges, we will decide whether and in what direction we will investigate further.

According to Korean news, the raid happened over the course of May 10th and 11th, with investigators seizing hard drives and accounting records from the Upbit headquarters.

No Help to the Korean Market

This latest news isn’t going to be well-received by crypto enthusiasts in Korea. Having previously been something of a haven for crypto, Korean authorities have clamped down in the last few months, restricting accounts, putting an end to anonymity and fining or shutting down non-compliant industries. The surge of strictness has come from concerns that young people are getting themselves into financial trouble through crypto, and it provides too easy an option for criminals to participate in money laundering and other such fraudulent activities. And with such a large exchange now under suspicion, the authorities are unlikely to be softening their approach any time soon. This isn’t good news for traders, as volumes and prices alike have decreased in Korea since 2018 began.

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