After the entire day of chaos surrounding South Korea's largest cryptocurrency exchange Upbit regarding the officials raiding its headquarters in Seoul, the exchange has finally made an official announcement. Due to some anti-money laundering compliance concerns, a number of crypto exchanges' corporate accounts in Korean banks have been investigated by the Korean Financial Intelligence Unit and the Financial Services Commission.
Although reports seem to conflict as to the precise nature of the fraud, it appears that police suspect UPbit has deceived investors with regard to their funds.
They have secured the firm's accounts and records from its computer systems.
This latest suspected fraud comes at a time of increased scrutiny in South Korea and Asia in general.
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It's the largest exchange in South Korea by trading volume.
Reportedly, about $637.5 billion won has also been exchanged illegally in foreign currencies which further resulted in the ban of cryptocurrency trading involving unidentified accounts.
"UpBit is now under investigation by prosecution, and we are [cooperating] diligently", the company said on its website, according to Google translate. The UPbit team told its clients that its exchange would remain fully operational and it will cooperate with the investigation of the local financial authorities. The company promises that all client assets are absolutely safe, adding that all transactions and withdrawals are operating normally. According to data from cryptocurrency tracker Coinmarketcap, the exchange has processed almost $2.2 billion in the past 24 hours, which makes it the third-largest crypto trading platform in terms of trading volume, behind OKEx and Binance.
Last month, South Korean prosecutors detained four executives from two cryptocurrency exchanges that also involved heads of Coinnest exchange on the allegation of embezzlement and fraud. Kim Ikhwan the founder as well as another executive were taken into custody in early April. Market watchers have cited the UPbit news and reports that the Mt. Gox trustee has dumped an additional 8,000 Bitcoins into the market as contributing factors in Friday's crypto price decline.