South Korea is a large market for cryptocurrencies. In fact, the country is known for its Kimchi premium, a higher price for cryptocurrencies compared to its price in other parts of the world. And you can’t blame South Koreans for their interest in cryptocurrencies. There are many reasons why South Koreans love cryptocurrencies. For one, you have North Korea that could easily cause economic and political conflict to the country.
However, South Korea’s crypto industry has faced a number of challenges including hacking incidences. And because of these hacking incidences, the current biggest cryptocurrency exchange in the country is UPbit. As of July 2018, UPbit supports more than 140 cryptocurrencies. In 2017, it has listed around 30 new counts.
UPbit was founded by entrepreneur Song Chi-Hyung hwo has a net worth of around 300 million dollars. Song Chi-Hyung is also the CEO of the Dunamu that is affiliated with Kakao which is the most popular messenger and search engine for South Korea.
Unfortunately, UPbit was
under scrutiny in recent months. There were accusations last May that UPbit was manipulating its balance sheet and is inflating the trading volumes. It has come to the attention of South Korea’s financial watchdog, Financial Services Commission (FSC) and Korea Financial Intelligence Unit (KFIU) that the crypto exchange was insolvent.
Yoojin, which is among South Korea’s top accounting companies, was then hired in order to look closely at the accounts of UPbit. Fortunately, Yoojin discovered that UPbit has enough funds to pay its investors. However, there are still questions regarding these findings considering that the Korean government hasn’t released a statement or additional information.
Dunamoo, which is a subsidiary of Kakao, released a report that cites the official audit results. According to Lee Seok-woo who is the president of Dunamoo, “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”. He also added that “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”.
UPbit’s Rise to the Top
UPbit unexpectedly reached the top of the South Korean crypto exchange market after problems encountered by Bithumb in recent months. However, many aren’t expecting UPbit to stay on top for so long considering that there’s the Shinhan Bank-backed cryptocurrency exchange Gopax.
Though Bitcoin’s price has been struggling, South Korea’s lawmakers are paving the way towards laws that could regulate the industry. South Korean lawmakers were reported getting ready to submit new bills that will address issues regarding cryptocurrencies, ICOs, and other blockchain-related issues.
Considering hacking incidences that happened in South Korea, not to mention irregularities in the niche, it is always a good idea to take a closer look at cryptocurrency exchanges. And though there are regulations being made in South Korea, the market is still quite new. And therefore, it is important to protect investors in order to ensure that the cryptocurrency exchange has enough funds to cover for withdrawal.