Two senior staff including the founder of UpBit Chi-Hyung was recently charged by the Prosecutors’ Office of the southern district of Seoul in South Korea for alleged fraudulent activities that happened on their exchange late last year.
According to CoinDesk Korea, the executives are accused of using insider trading to attract users to their exchange.
Prosecutors claim that the men in question executed a deal worth 254 trillion won (or $226.2 billion) by transferring money from the company's corporate account. The law enforcement agents claim that UPbit did this willfully, thus using fake trade volumes to lure people to their service.
Another accusation led against the UpBit executives is that they sold 11,550 bitcoins to users to gain 150 billion won (or $133.8 million) through fixed transactions.
UPbit Response To Prosecutor's Indictment For Fraudulent Activity
The crypto exchange which is one of the largest in South Korea released a statement to refute the allegations made by the Prosecutor's office.
For the alleged fake trading volume, UPbit said it was providing liquidity to the corporate account within that period (September 24, 2017, to December 11, 2017) to stabilize the trading market, and further adds that the company account has no option to withdraw funds.
UPbit said they made no gains from such movement of funds or considered it as a way to trade for profit. Meanwhile, the company admitted to having pumped up trading volumes on their exchange by 3% sometime in 2017 but says it did not affect the market during that period.
Sadly, this is not the first time that the Prosecutor's office has charged UPbit for alleged fraudulent activity. In May, the enforcement agents raided the company's head office based in the Gangnam-gu district. The firm's accounting books and hard disks were seized in search of evidence to prove that the exchange sold cryptocurrency to fake customers that didn't exist on their platform.
Another exchange currently under regulatory watch is Bitfinex who the U.S Department of Justice has opened a probe into whether the exchange had a hand in manipulating BTC prices using Tether (USDT).
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