South Korea's Biggest Cryptocurrency Exchange is Being Investigated by Police

Galtero Lara
May 17, 2018

Subsequent reports in the media state that South Korea's financial regulators, including the Financial Supervisory Service (FSS), have launched an investigation into potential liquidity issues at Upbit.

The regulators say that the use of corporate accounts can lead to fraud such as recently seen with whose CEO was charged with embezzlement.

Though a circular issued by the government at the end of January mandated the use of real-name system for crypto transaction and not to use corporate accounts, statistics shows that out of all the crypto accounts only 30% of them had been converted into real- named accounts in so far. Upbit is the focus of an investigation by local police and 10 other investigators for alleged fraud conducted by the massive exchange. But the fact also remains that many accounts in the said exchanges are yet to be converted to real-name accounts.

Overall, UPbit are accused of accounting for currencies that they did not have and did not store. In addition, all small and medium-sized exchanges continue to use corporate accounts for crypto transactions.

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The original cryptocurrency fell below the $9,000 level on Friday, after it was reported that prosecutors from the Seoul Southern District Prosecutors' Office had raided the offices of the company, which is one of the world's largest virtual coin exchanges in the world. The FSC is in charge of policy regulation, while the FSS examines and supervises financial institutions. A discussion on the collaboration with other countries in regard to the crypto regulations had been in South Korea's agenda for a while. Much stress was laid in the meeting on the need for IOSCO to corporate on the International Olympic Committee regulations and cryptocurrency.

The FSC is collaborating with authorities in other countries. Earlier in the year, many banks in South Korea were subject to investigation and regulatory pressure by officials to remain within the confines of the anti-money laundering (AML) compliance requirements.

Suk-heun states that regulations governing blockchain projects and cryptocurrency trading shall be eased, as cryptocurrencies exhibit "some positive aspects". Let us know in the comments section below.

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