South Korea’s Financial Supervisory Service sent 10 investigators to the head office of UPbit, located in Gangnam-gu, Seoul, at 10 am on the 11th. UPbit is under investigation for transferring customer funds from their accounts to an executive’s account.
The story here is that an executive at UPbit transferred customers’ coins into his or her own personal account. Like any other centralized exchange platform, trading on UPbit isn’t a transparent process. A similar event happened over at BitGrail a few months ago, where over $150 million worth of XRB was “stolen” over a period of a few months without customers’ knowledge. Always remember the exchange controls the balance you see on the computer screen. It doesn’t matter if those coins actually exist or not.
Regarding this event, it would be truly stupid for an executive to siphon customer funds like this. Obviously greed is the motivating factor, but why is it necessary to be greedy when you’re an executive at one of the biggest exchanges in a country that holds a very supportive stance on cryptocurrencies and blockchain projects. Cryptocurrency is an emerging asset class in its infancy. Now is the wrong time to be greedy when there’s still so much easy money to be made in the future. This makes no sense unless the executive happened to be on his or her way out.
It’s unclear if this news was the cause of BTC’s ~7% drop today. If so, remember what happened after Bithumb’s “raid” a few months ago?