Upbit, Korean cryptocurrency exchange indicted of fraud trading schemes
Upbit, Korean cryptocurrency exchange indicted of fraud trading schemes
  • Jason Kang
  • 승인 2018.12.21 16:07
  • 댓글 0
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Allegedly ill-willed operators of Ubit Exchange, Korea’s second largest crypto currency exchange, were indicted with no arrest on charges that they have conspired not only to create fake accounts on the exchange but also get engaged in a ‘wash trading’ to artificially inflate trading volumes and amounts.

The indictment is the latest of a series of crypto-currency price and trading volume manipulation scandals that have gone on trial during the past couple of months, discrediting the integrity of the country’s crypto-currency exchange market.

The Seoul Southern District Prosecutor Office said today that the office accused three high-profile executives of Dunamu Co., Ltd., the operator of Upbit Exchange, of ‘fraud and cheat’ schemes, alleging that they have conspired to illegally manipulate trading volumes and prices of crypto currencies.

According to the prosecutor office, chairman of Dunamu board of directors, CFO and team leader have allegedly plotted not only to call “fake buy orders’ worth 254 trillion won, but also do 4.2 trillion won worth of “washing trade’ to artificially up trading prices over other exchanges. They are charged with swindling 150 billion won out of the fake accounts trading. 

Yet, the prosecutor office haven’t issued arrest warrants for the three suspects on the ground not only that the exchange will have no chance to default on their assets, but also is normally operating as one of the country's highly–recognized exchanges.

Bucking the prosecutor office’s allegations, Dunomu Co., Ltd. refuted in its statements that the alleged illegal trading activities had been done only during the 3 month period of between Sept. 24 and Dec. 31 of 2017, during which the exchange had been preparing itself to open.

“Since then, we have done nothing illegal so far,” the statement reads.

The statement strongly insists that the exchange had never done such frauds as ‘wash trading and fake order calls for buying and selling in the ill-willed purposes for money swindling and price manipulation that the prosecutor office alleged we had committed, adding that the three suspects and the exchange alike had cheated not a single money out of the trading.

Yet, the exchange conceded that they had committed the so-called wash trading during the first two months in operation as part of the market promotion program, but added that the exchange doesn’t think that the wash trading had exerted no influence on price fluctuation, as it just represented mere 3% of the total trading volume. 

The wash trading refers to a scheme, under which conspirators in the schemed call sell and buy orders simultaneously at fixed prices with no real transaction of crypto currencies to artificially inflate trading volumes.

The scheme is mainly used to move up the rankings of global exchanges.

jason@thebchain.co.kr


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