One of South Korea’s largest cryptocurrency exchanges, UPbit has had three of its top senior executives charged with fraud. The company’s founder, Song Chi-Hyung being one of the executives being charged.
According to the police reports, the accused have managed to get away with about US$ 226.2 billion by the means of fraudulent transactions from September to December of 2017.
The reports say that they used fake corporate accounts to inflate the trading volume of the exchange.
The trio of arrested executives also played a part in selling 11,550 BTCs to customers through rigged transactions, earning them almost $133.8 million.
UPbit quickly reacted to the accusations and arrests and put out a statement denying any involvement in the crimes on the company’s part. The statement read,
“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.”
The company also emphasised that they never profited or benefitted in any other way from the fraudulent transactions. However, the company has accepted later that some of the transactions did happen through its network for marketing reasons.
Earlier this year, UPbit also faced accusations that they were selling cryptocurrencies that they never had to begin with, to customers. Following this, their head office in the Gangnam district was raided in March. The prosecutors seized rhe company’s hard disks and accounting books in the raid.
The Government of South Korea has been increasingly hostile towards businesses that deal with cryptocurrencies throughout 2018. The country’s police and tax officials raided the offices of cryptocurrency exchanges Bithumb and Coinone during an ongoing investigation into tax evasion. Similarly in March of this year, three more unnamed cryptocurrency exchanges were raided by prosecutors amidst allegations that the employees of the exchanges had embezzled the funds of their customers.
In July, South Korea’s Government announced that its top financial regulator was going through “major organisational changes” and that a separate department was going to be set up for the regulation of the Blockchain insdustry.
It seems that much like the other countries that are showing interest in cryptocurrencies, South Korea has taken a measured approach towards the nre technology, slowly giving more autonomy to the indistry, but keeping a close watch on its activities, cracking down quickly on accusations.