UpBit Crypto Exchange Executives Indicted for Market Manipulation

South Korea's largest cryptocurrency exchange, UpBit, faces criminal charges after top executives were formally indicted by the country's legal prosecutors, as reported by Business Korea on December 21, 2018.

Three senior exchange executives, including founder Song Chi-Hyung, were arrested by local authorities on charges of fraud.

The arrests come after complaints were filed against the company by investors who analyzed UpBit's trading activities.

While no official explanation for the figures exists, they were presumably conducted to inflate trading volumes to attract customers to use the exchange.

At the time, UpBit was convicted for allegedly selling large amounts of cryptocurrency to customers which did not exist.

"The Company provided liquidity to the corporate account in order to stabilize the trading market at the beginning of the service opening."

The notice added that corporate accounts do not have a withdrawal option, meaning all trades conducted were largely 'aesthetic' in nature.

UpBit noted that the business neither "Benefited or traded" through the process, although the company confirmed that it made several transactions for "Marketing purposes" that lasted over two months.

The wash trading was said to comprise 3 percent of total market volume at the time.

In a market which is ripe with wash trading, manipulation, and investor fraud, a strict regulatory cleanse may be necessary.