Bitcoin Prices Slide as South Korea's Largest Crypto Exchange Gets Raided

World’s 4th Largest Crypto Exchange Raided over Fraud Charges Market Goes Deep Red

Korean Crypto Exchange Upbit Raided Amid Suspicions of Fraud

Upbit allegedly "pretends to hold virtual currencies without holding virtual currencies", the paper reported.

So, now that it is confirmed that Upbit is under investigation, let's understand its implication and how exactly it all started?

According to CoinMarketCap.com, the broader cryptocurrency market value has fallen almost $100 billion in the past week to $380 billion. The South Korean Financial Supervisory Service did not immediately respond to CNBC requests for comment after local business hours.

The widespread declines took place after reports that authorities raided South Korean UPbit. This was the time when the Financial Services Commission (FSC) got involved.

Last month, another exchange, Coinnest, was investigated for charges of embezzlement and fraud, and their chairman, Kim Ik-hwan was detained. The FSC will be investigating UpBit's computers to audit whether or not the exchange was lying to the authorities.

Crypto prices in South Korea are usually at a premium (KimChi premium) to the rest of the market.

The startup exchange notably refused to join other South Korean exchanges in support of self-regulation at the end of a year ago.

A point worth noticing here is that Kakao, the South Korean Internet giant is behind this exchange.

Several analysts agree that the UPBit exchange raid was behind the falling prices today.

"This is not a server problem, but a manipulation". Most are talking about it, and if you look at prices in Korean exchanges, they are leading the drop. By December, it said it had 1.2 million subscribers, one million average daily users and an average daily transaction of 5 trillion won (around US$4.8 billion). However, Upbit claimed the increase in order volume the reason behind delayed reflection of BTC market. The platform is accused of diverting client funds into the wallets of its executives and forging its accounting records to cover up the malfeasance.

The presented content may include the personal opinion of the author and is subject to market condition.

The cryptocurrency market turned upside down on Friday, having lost about $50 billion market capitalization overnight.

Latest News