UPbit Accused of Fraud With 254 Trillion KRW in Fake Orders
Employees at UPbit have been charged with faking orders to inflate the exchange's volume.
As reported today in nocutnews, the FSC has charged three former employees of Korean cryptocurrency exchange UPBit, including the former CEO, with fraud for fabricating up to 254 trillion KRW ($226bil) in orders to inflate volume on the exchange.
The FSC alleges that employees at the exchange committed fraud in charges that were issued this morning. The charges explain in detail how the employees manipulated their data processing system via a bot to inflate the amount of transactions that appeared to be settling, which led to a pump in the market.
The FSC further alleges that this scheme took place at two separate times. Orders may have been fabricated for nearly two months straight from October 2017 through December 2017, then more recently on the 18th of December this year.
The bot program may have been used to target under-performing coins on the exchange to save face for both the exchange and the company which the under-performing coin comes from. Users of UPbit can easily note many times in the past year when coins spontaneously pumped.
According to a representative from FSC, “I’m worried about investors who may lose money in this market because of exchanges like UPbit. We need a way to make the market and the industry fair and transparent.”
UPbit’s Response
UPbit released a response to the charges from the FSC early this afternoon. In the response, they admit that manipulation took place from September 24th to December 31st 2017, but that only a portion of their transactions were fraudulent. For the last 8 months, however, UPbit claims that they have been cooperating with officials from the FSC over the alleged fraud.
Following their confession to fraud, UPbit explains that as a corporate body, they did not liquidate any assets acquired via fraud or use fraudulent assets to make further transactions. This statement runs counter to other points made in their confession and contradicts the charges currently being pressed against them.
UPbit has always had the ability to artificially set the price of coins on the exchange at any time via the ‘market sell’ option. They used the option to artificially set market prices as a way to protect users when coins pump or dump.
The response states, “[The company protected customers from rapidly changing market prices by utilizing about 200mil KRW of our own liquidity.]”
They claim that the amount of fraudulent transactions and any other allegations against them are “[misunderstandings]” which will be cleared up in their time in court. Updates to come.
