After a police raid over allegations of fraud and insolvency, UpBit, South Korea’s leading cryptocurrency exchange demonstrated full financial competence after a final audit report.
Dunamoo, UpBit’s parent company, cited a report proving the exchange has ample assets to match its balance sheets.
In fact, UpBit currently operates with a 27% surplus of funds, according to the statement “127% Deposit Against Assets to Be Paid to Customers”, made August 3rd, 2018.
Appearing keen to end speculation over UpBit’s legitimacy, Lee Seok-woo, President of Dunamoo noted:
“UpBit currently has the exact amount of money held by the platform’s investors along with additional funds, more than enough to compensate every investor.”
The UpBit Saga
Since the raided by South Korean police in May 2018, UpBit has faced a torrent of accusations — including claims of manipulated balance sheets and transferring customer funds to employee accounts.
I've heard that a lot of people are concerned about the Upbit raid in South Korea for potential fraud. In my opinion, it would be idiotic to doing anything that could be considered fraud when you're literally one of the largest registered exchanges in an emerging currency market.
— Nicholas Merten (@Nicholas_Merten) May 11, 2018
Promptly after the raid, the UpBit team wasted no time in hiring Yoojin, one of South Korea’s largest accounting firms, to conduct a comprehensive audit of its balance sheet and cryptocurrency holdings — in the face of a pending investigation from Korea’s financial watchdogs.
While police confiscated a number of the exchange’s hard drives and accounting records, Yoojin was able to testify to UpBit’s inculpability. On the 15th of May, 2018, Yoojin confirmed that UpBit held all cryptocurrency as claimed on its balance sheets — as reported by Korean media outlet Money Today:
“Since early 2018, UPbit created snapshots of its multi-signature wallets and funds stored within them for auditing purposes. Yoojin accounting firm, a major accounting firm based in Seoul, confirmed that all of the funds on the UPbit platform match the cryptocurrency holdings of UPbit stored in its multi-signature wallets.”
However, Yoojin’s findings may not have been adequate for the South Korean government, who are yet to offer a public statement on the matter.
With no word from the Korean government, Dunamoo’s confirmation will be sufficient to soothe any investors anticipating the horror of another exchange collapse akin to Mt Gox.
A number of Korean exchanges have wrestled with regulatory issues in recent months. Bithumb — the nation’s second-largest exchange — temporarily halted the creation of new accounts, after a contract renewal was denied with a number of Korean banks.
UpBit, however, would appear to retain its clean (legal) bill of health, with Lee Seok-woo closing:
Hence, UPbit is able to process withdrawals for customers upon the request of its customers and the exchange will continue to release audit reports on a regular basis to prove its solvency.
Cover Photo by Dmitri Popov on Unsplash