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Bitcoin Price Falls Below $8,500 as Upbit Under Investigation By FSC & KoFIU

Reading Time: 3 minutes by on May 11, 2018 Bitcoin, Finance, News, Regulation
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Upbit, South Korea’s largest cryptocurrency exchange platform, is currently under investigation as it is suspected of engaging in false financial reporting activities, deceiving investors in the process as the price of bitcoin breaks below $9,000.

Local media outlets in South Korea also report that the exchange’s office has been raided. The latest development follows is the a series of crackdowns from law enforcement agencies on cryptocurrency exchange platforms. In April, the president of Coinnest, another exchange in Korea was also arrested.

Upbit HQ Raided

A joint team of the Seoul police, the Korean Financial Intelligence Unit (KoFIU), and the Korean Financial Services Commission (FSC) conducted a raid on the Upbit headquarters in the Gangnam. The law enforcement and financial regulatory officials confiscated both paper and digital records and are reportedly in the process of combing through the lot to obtain evidence.

The raid took place on May 10, 2018, and local police have declined to give any comment other than to say that the matter was still under investigation.

Reports making the rounds in the country reveal that the Upbit is being investigated for engaging in illegal movement of cryptos from the wallets of their clients. The platform is also accused of altering their books to hide their wrongdoing. According to news sources, authorities suspect that client funds are being moved to wallets owned by executives of the platform without the knowledge of the depositors. An audit of Upbit’s holdings is already underway to determine the platform’s culpability.

Rumour in the air is that Vice-Chairman of Etoday, who probably takes major decisions at Bithumb was behind this news since it was first covered by Etoday. Bithumb is one of the largest Korean crypto exchange and competitor of Upbit.

Upbit has confirmed the investigation with a statement on its website, saying:

“Upbit is currently under investigation by the prosecution, and we are working diligently. Upbit services such as all transactions and withdrawals are operating normally. Your assets are kept securely in your account, so you can rest assured that you can use Upbit services.”

Crypto Community Reaction

Reactions from the crypto community on social media and online message boards are split between worry over the potential impact on crypto prices and notions that it is a bit of an exaggeration.

Some analysts believe that regulatory scrutiny often has a negative effect on the market. Indeed, some of the more significant crypto price bombs have come on the back of regulatory crackdowns. These interventions of oversight agencies tend to dampen the level of enthusiasm in the market which usually devolves into panic selloffs. Other analysts have declared that the market reaction is a bit exaggerated given that the platform is still operational.

Bitcoin Price Drops Below $9,000

Crypto prices have declined within the past 24 hours, and the situation with UPbit is seen by some as being connected. The price of bitcoin has dropped below $9,000 since May 10, 2018 a decrease of more than seven percent from the end of  May 9, 2018.

BTC-USD hit a low of $8,400 on the Bitstamp exchange on May 11. BTCManager’s latest weekly crypto market outlook highlighted $8,537.58 as an important support level, so as long as this level holds, we should see an upward move over the coming days. A daily close below $8,537.58 would suggest a new trend formation according to the daily Renko chart, entering into a downward trend. Weekly support is found at $8,188.07.

Ethereum’s ether, as well as many of the top 100 cryptos, have also declined within the last 24 hours.

Upbit FUD Bloodbath? Source: CoinMarketCap

Negative comments from Bill Gates, Charlie Munger, and Warren Buffett, as well as reports that the Mt. Gox trustee is set for another massive sell off, may have also contributed to the decline.

The decline in crypto prices comes as the industry gets set for the 2018 edition of the Blockchain Week in New York, a period that historically preceded rallies in the crypto market.

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