South Korea's largest cryptocurrency exchange under investigation for fraud

South Korea widening its Probe on Crypto Exchanges

South Korea's largest cryptocurrency exchange under investigation for fraud

South Korea, the third largest market for cryptocurrencies, banned cryptocurrency trading using anonymous accounts earlier this year.

South Korea's top financial regulators are teaming up with prosecutors to widen their investigation of domestic cryptocurrency exchange operators. The Financial Services Commission (FSC) a year ago banned initial coin offerings (ICOs) in the country.

The use of corporate accounts for crypto transactions should have been discontinued when the government introduced the real-name system at the. So far, however, up to just 30 percent of all crypto accounts have been converted into real name accounts. Thus, the two bodies aim to join forces to eradicate any fraud or money laundering committed by crypto-businesses, not eradicate the crypto-market itself.

The six banks that have the ability to issue real-name accounts have chosen to only service the country's largest crypto exchanges: Upbit, Bithumb, Coinone, and Korbit.

Officials recently raided the country's leading crypto exchange UPbit, which is now being investigated by police. That leads to other small and medium-sized exchanges to continue using corporate accounts for crypto transactions.

One of the major concerns raised by the regulators is that corporate accounts could facilitate fraud. One example of such action is with the CEO of Coinnest, who was charged with embezzlement. The largest Korean crypto exchange by volume, Upbit, is also now under even though banks have been converting its accounts to real-name ones. Even after it has been converting into real name accounts.

The FSS examines and supervises financial institutions but with the oversight of the FSC.

The FSC is collaborating with authorities in other countries. A discussion on the collaboration with other countries in regard to the crypto regulations had been in South Korea's agenda for a while. Our latest findings show that the domestic exchange faked its balance sheets and deceived investors.

The publication also said that the prosecutors had secured computer hard disks and accounting books of the company and planned to investigate whether Lee Suk-woo, representative of the company behind Upbit, was involved in the matter.

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