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UPbit Audit Reveals That South Korea’s Cryptocurrency Exchange is Not Guilty

by | May 15, 2018 | Cryptocurrency, Cryptocurrency News

UPbit | South Korea | Cryptocurrency Exchange | UPBit scam

Last week, South Korea’s largest digital-currency exchange, UPbit came under investigation by local authorities, the latest in an expanding crackdown on cryptocurrencies. Investigators from the Prosecutors’ Office of the southern district of the country’s capital firstly appeared at the head office of the exchange on May 10.

Read more: Bitcoin Price Goes Below $9000 After South Korea’s Biggest Cryptocurrency Exchange Gets Raided

According to some sources close to the deal, UPbit is suspected of having faked its balance sheets and deceived investors. That’s why 10 investigators were sent to the exchange’s head offices to get access to the computer system of the company with a view to audit its digital currency holdings.

Now the further investigations and internal audits disproves suspicions of fraud, which confirms that the exchange did not inflate its balance sheet and deceive investors.

A source mentioned that the main cause of the irregularity being investigated is in regards to liquidity issue. The issue involves sharing/ pooling liquidity with other exchange as UPbit only operates wallets of around 90 cryptocurrencies even though the exchange has 130 cryptocurrencies listed on the platform.

It seems to be that the regulators did not understand the share liquidity. Upbit is sharing liquidity for a lot of cryptocurrencies with other exchanges. This is not uncommon in the world of cryptocurrency, as pooling resources maximizes liquidity for all trading platforms involved.

The lack of wallet support for dozens of cryptocurrencies led to the investigation and the government accusing UPbit of inflating its balance sheet.

UPbit, owned by a subsidiary of South Korean communications giant Kakao, is the world’s fifth largest crypto exchange.

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