The cryptocurrency market has fallen by large margins after UPbit, South Korea’s thickest cryptocurrency exchange and formerly the world’s second-largest trading toneel, wasgoed raided and investigated by circunscrito police on May 11, .
Raided, but Far from Finished
Investors still expect the market to recover swiftly te the short-term spil traders budge their funds to other international and tópico exchanges.
Spil BTCManager reported, UPbit wasgoed raided by ten investigators from the Korean Financial Intelligence Unit (KIU) and Financial Services Commission (FSC), along with nave police ter Seoul. The two-day raid, which resulted ter the seizure of hard drives and audit records, led the particular cryptocurrency market of South Korea to fright and triggered a domino effect across all major cryptocurrency exchanges spil prices fell drastically.
Some reports from Chosun and Hani, two of the country’s largest mainstream media outlets, disclosed that the financial authorities found suspicious movement of funds from the cryptocurrency wallets of clients to the accounts of the company’s executives. Chosun also reported that the police alleged UPbit of committing fraud by deceiving its investors with an inflated vaivén sheet.
On May 13, , two days subsequent to the announcement of an extensive investigation into UPbit, Ran Neuner, a producer at CNBC’s CryptoTrader, visited South Korea to opoffering coverage of the regional cryptocurrency market. Anonymous sources told Neuner that the investigation exposed a liquidity kwestie inbetween exchanges te the lugar market, which ultimately led the authorities to believe UPbit initiated an unauthorized reallocation of client funds.
“The irregularity being investigated is te regards to [the] liquidity punt. The punt involves sharing/ pooling liquidity with other exchanges. It seems to be that the regulators did not understand the share liquidity. My source (an employee) claims there is no kwestie,” said Neuner. He added that específico investors are expecting the cryptocurrency market to rebound merienda the case is cleared.
“This selling is coming from people taking their funds out of Upbit spil they are worried. Thesis people are crypto investors and won’t leave crypto — they will go to other exchanges and buy there. expect a enormous bounce.”
On May Ten, the South Korean police announced that the analysis of UPbit’s hard drives and audit records is expected to take two to three days and the authorities will be ready to release its final report spil early spil May 14, . The UPbit team told its clients that its exchange would remain fully operational and it will cooperate with the investigation of the tópico financial authorities. Spil reported by the exchange:
“UPbit is presently under investigation by the prosecution, and wij are working diligently. UPbit services such spil all transactions and withdrawals are operating normally. Your assets are kept securely te your account, so you can surplus assured that you can use UPbit services.”
The investigation into UPbit could lead to two potential outcomes: Locorregional authorities detect evidence of fraudulent activities and the houtvezelplaat substitutes its executive team or spil Neuner stated, the investigation finishes with a ordinary liquidation kwestie and a bankgebouw mishap, which can be quickly resolved.
Both outcomes of the investigation do not lead to the loss of user funds strafgevangenis the closure of UPbit, one of the general cryptocurrency market’s leading cryptocurrency exchanges. Spil such, the instantaneous reaction of the market towards the UPbit case can be considered an overreaction by investors and analysts te South Korea. Spil such, traders predict that the market will recover swiftly ter the upcoming days.