South Korean regulatory authorities suspect that board members of the renowned Upbit crypto currency exchange could have been diverting funds from the platform to their personal accounts. The investigation of the authorities began under the suspicion that these managers could be operating without having direct custody of the funds of their clients.
District attorneys in the Southern District of Seoul would be on the trail of forgery and fraud. The financial research team, made up of 10 specialists, went to the Upbit headquarters, located in Gangnam-gu, Seoul, on May 10 and 11. There, they took into custody electronic devices and transaction records to verify irregularities, as the Prosecutor's Office commented:
We have secured hard drives and accounting books by confiscation. The analysis is expected to take days.
The prosecution mainly suspects the company's top officials. In fact it will focus on the CEO of the company, Lee Seok-woo, who is the main suspect of the diversion of the deposits of its customers to an account alternating with those handled by the company. Seok-woo has been in charge of the operator since December of last year, being delegated to the position by the company Dunamu, the main person in charge of the cryptocurrency exchange house.
"I decided to take on the role of CEO after seeing Dunamu's global growth potential and the vision of the cryptocurrency market and the blockchain industry," he said at the time.
According to local media, the authorities believe that the Upbit company is performing computerized system operations without having funds in cryptocurrencies, since the platform operates with fewer portfolios than the number of interchangeable cryptoactives in its own offer, so Customers can not verify the management of resources. EOS, TRON, BTC, ADA, and BCH are the main cryptoactives exchanged on the platform that has an exchange volume of 237 BTC, equivalent to more than 2 billion dollars, at the time of writing.
After knowing the investigations carried out by the authorities of the Asian country, there was a wave of withdrawals by the traders of the platform. Although suspicions about Upbit's activities have not been confirmed, South Korean customers have withdrawn considerable amounts of cryptocurrencies from the platform.
The company confirmed the investigation and published a statement in which it ensures that withdrawals and deposits continue to work normally.
This fact could be related to the correction that occurs in the cryptocurrency market. In fact, the 10 main currencies of the market in terms of market capitalization are on the downside. It is worth noting the significant fall of Cardano, with an increase of 18.18%, a price of 0.26 dollars and a capitalization of 6.795 billion dollars. This is one of the most exchanged currencies in the South Korean exchange house.
For its part bitcoin, has a market capitalization of 146.270 billion dollars, and a price of 8,590 dollars. The correction, in this case, has been 8.21%. The ether has a value of 680 dollars, a capitalization of 67.603 billion dollars, which means a correction of 10.25%. It is followed by ripple, bitcoin cash and EOS with 15.22%, 16.37% and 18.19% correction respectively.