Bitcoin Slips Below $9000 Following Korean Exchange Raid

13 May, 2018, 09:20 | Author: Laverne Higgins
  • UPbit South Korea’s largest cryptocurrency exchange has been raided by local police

Major cryptocurrencies tumbled Friday after news prosecutors raided UpBit, the largest cryptocurrency exchange in South Korea.

According to the publication, the financial investigation team of the Seoul Southern District public prosecutors' office sent prosecutors and investigators to Upbit headquarters on May 10 and May 11 "to secure computer hard disks and accounting records". The exchange is suspected of fraud for allegedly faking its balance sheets and deceiving investors. "The analysis is expected to take days", and that the final report on the UPbit case will be released next week.

News of the exchange raid rocked prices with UPbit being the nation's largest digital assets trading platform.

Cryptocurrency exchanges have been under investigation in Korea since March.

The prosecution suspects the company sold more virtual currencies than it owned and thus committed fraud. Prosecutors are investigating whether the company defrauded customers by claiming it had cryptocurrency and electronic wallets that it didn't have.

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"UpBit is now under investigation by prosecution, and we are [cooperating] diligently", the company said on its website, according to Google translate.

"A statement was posted on the exchange's website today to inform customers that "[Upbit] is now under investigation", but that "services such as all transactions and withdrawals are operating normally" and "assets are kept securely in your account, so you can rest assured that you can use [Upbit's] services". The company promises that all client assets are absolutely safe, adding that all transactions and withdrawals are operating normally.

The South Korean operator dealt approximately $1.6 billion of digital currency trades in the last 24 hours, which makes it the largest cryptocurrency in the country and the fourth in the world by daily trading volumes.

Last month, another exchange, Coinnest, was investigated for charges of embezzlement and fraud, and their chairman, Kim Ik-hwan was detained. Chatter at the time suggested that the McGox custodian who has been tasked with selling off a large number of shares from the bankruptcy of Mt. Gox was dumping shares and this led to the market taking a dip.

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