Korean Legislator Warns Against ‘Self-Listing’ on Upbit

Jintae Kim, National Assembly member from the Liberal Party of Korea, has filed a formal complaint against Kakao and Upbit for their apparent ‘self-listing’ or ‘false and autonomous’ listing and transactions. The complaint calls for the FSS to look closely into the LUNA listing on Upbit. Kakao and GroundX are the companies behind the Klaytn enterprise blockchain.

The complaint comes in light of the fact that Kakao owns 8.1% of Dunamu, Upbit’s parent company. Jintae Kim contests two issues of wrongdoing on behalf of Kakao, Upbit, and Dunamu in regards to listing cryptocurrencies on the Upbit cryptocurrency exchange.

The first issue is that KLAY was listed on Upbit Indonesia relatively suddenly, but to-date KLAY has not been listed on Upbit Korea. It is notable for cryptocurrencies with as much hype as Klaytn, being from South Korea, to not be initially listed on a Korean exchange.

The unusual listing circumstances are echoed by the investment Terra made in Upbit. Shortly after that investment was made, Upbit listed Terra (LUNA) at 72000 Satoshis, but now trades below 10000 Satoshis. Upbit owns 20 million LUNA tokens, which were purchased directly from Terra.

This suggests that Upbit and Dunamu are listing tokens that they have developed internally or are directly involved in on one of South Korea’s largest crypto exchange by daily volume.

The second issue detailed in the complaint is that Upbit has been artificially inflating its trading volume. Wash trading is not a new issue among crypto exchanges. The problem highlighted in the complaint from National Assembly member Kim is that wash trading is a form of market manipulation which should be illegal.

He urged the Financial Supervisory Services to take a deeper look at the LUNA listing and to monitor all domestic exchanges more closely.

Kim said, “Upbit, which has grown to be a large-scale exchange in a short time, has already undergone criminal trials concerning 254 trillion won of imaginary orders, 420 trillion won of impersonation transactions, and 149.1 billion won of bitcoin fraud… Special monitoring by financial authorities is required.” 

The Blockchain Transparency Institute issues reports on verified exchange volume which has twice in a row listed Upbit as BTI Verified as recently as September 2019 in regard to the exchange’s apparent low level of wash trading.

The Liberal Party of Korea has established itself as a strong proponent of cryptocurrencies in South Korea, going as far as suggesting ICO and IEO be made legal in their economic proposal for 2020.