UPbit Exchange Executives Indicted for Fraud

 

 

 

 

 

The executives of South Korean exchange Upbit have had fraud charges laid against them by the Prosecutors’ Office of the southern district of Seoul, according to a report by Coindesk.

It is alleged that the executives made fraudulent transactions between September and December of 2017, by using fake corporate accounts that lodged fake orders in 35 cryptocurrency markets worth $226 billion USD to inflate trading volumes.

Higher trading volumes are associated with more fee-paying customers, and greater listing fees charged to development teams for the creation of new trading markets.

The accused are said to have sold 11,550 bitcoins to customers worth $133.8 million dollars through rigged transactions.

UPbit have denied the allegations in a response stating that the company was providing liquidity to its corporate account in a way that would stabilize trading markets at the beginning of service openings, adding that the corporate account does not have a withdrawal function.

The company claims that these transactions did not benefit UPbit, but ceded that some early transactions were made for marketing purposes that did not affect the market price, but did account for around 3 percent of the total market volume.

UPbit’s head office was raided back in March, with hard disks and accounting books seized under the suspicion that UPbit was selling cryptocurrency to customers through its platform that the company did not actually possess.

Author: Timothy Goggin

Timothy Goggin is an economic analyst with an interest in the application of moral philosophy and decentralized systems. He studied economics at the Business School at Victoria University of Wellington, New Zealand. His area of research is the consequential and moral dimensions of implementing digital currencies and the resulting synergies for consumers in the trading environment.

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