Upbit Audit Proves South Korea’s Crypto Exchange Not Guilty

Upbit Audit Proves South Korea’s Crypto Exchange Not Guilty

cryptocurrency exchange News
May 17, 2018 by Sandra Onyeiwu
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Upbit, South Korea’s largest cryptocurrency exchange, has carried out an internal audit that disapproves suspicions of fraud. Investors can breathe a sigh of relief as the audit revealed that the company has not done anything wrong. Last week, the South Korean police raided UPbit’s headquarters to investigate into the practices of the exchange after receiving
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Upbit, South Korea’s largest cryptocurrency exchange, has carried out an internal audit that disapproves suspicions of fraud. Investors can breathe a sigh of relief as the audit revealed that the company has not done anything wrong.

Last week, the South Korean police raided UPbit’s headquarters to investigate into the practices of the exchange after receiving tips that the exchange allegedly has been processing cryptocurrency trades without actually holding user funds.

The underlying problem originated from the fact that UPbit has 130 cryptocurrencies listed in its trading platform, but only 90 dedicated wallets are available to investors. This resulted in a problem in which investors could not deposit or withdraw the 40 unsupported currencies, forcing them to convert to bitcoin to transfer assets off of the platform.

According to local media, the suspicions against Upbit include coinless transactions, allegations of money laundering, leakage of money through US trading sites, and suspicion of insider trading during the listing process. No charges have been filed at the moment of writing.

Lee Seok-woo, president of Upbit’s parent company, Dunamu Inc., says the internal audit dismisses the suspicion of “book negotiation,” according to local news agency.

“In early March, when Upbit was suspected of only book transactions without coins…I have been notified that the amount of coins is 100% identical to the number of coins” in the wallets.”

Upbit calls this whole situation a misunderstanding as it has “never bought or sold cryptocurrencies that it did not own since it opened last October”. According to the exchange, there is a separate wallet for keeping and storing virtual currencies apart from the deposit and withdrawal wallets, and virtual currencies without depository wallets are kept there.

This storage wallet can only be withdrawn together with Bittrex (its US affiliate) and a trusted third party.

 

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