Three executives at UPbit, one of the largest crypto exchanges in South Korea, were formally charged today for fraud. CoinDesk reported that senior staff, including founder Song Chi-Hyung, were indicted by Seoul’s Prosecutor’s office for using a fake account to make bogus transactions amounting to $226.2 billion in the final quarter of 2017 to boost trading volume data. They are also suspected of selling 11,550 bitcoins to false clients. Prosecutors seized computer disks and accounting books from UPbit’s offices in March.
However, UPbit rejected the allegations. Stating that, “The Company provided liquidity to the Company’s corporate account in order to stabilize the trading market at the beginning of the service opening. This period is from September 24, 2017 to December 11, 2017”. Other transactions amounting to 3% of the exchanges total volume had been made for “marketing purposes” the exchange noted. They added that there was no withdrawal setting on the account used to make the transactions and that it had “not benefited” from them. UPbit is not the only exchange faking volume, 23 out of the top 25 exchanges are reportedly faking their trading volume.
This is the sixth Korean exchange this year to have been investigated, following raids on Bithumb and Coinone in January 2018 for suspected tax evasion. A further three (who remain unnamed) were suspected of embezzling funds from customers’ accounts in March.