Upbit, South Korea's largest cryptocurrency exchange, is being investigated by local police and ten investigators for alleged fraud, local news outlet Chosun reports today, May 11. Upbit is a crypto-only exchange run by a subsidiary of Korean tech giant Kakao, and currently the fourth largest crypto exchange globally by 24-hour trade volume.

Chosun reports that police believe the exchange has faked its balance sheets and deceived investors. South Korea's Financial Supervisory Commission (FSC) reportedly sent ten investigators to the exchange’s head offices in Seoul at 10 am this morning, and will access the company’s computer system to audit the exchange’s virtual currency holdings.

Multiple crypto commentators on social media have suggested that the news is already impacting crypto markets, with many of the top 100 coins down today by over 15 percent.

Upbit is not the first crypto exchange to attract the Korean authorities’ attention this spring. As Cointelegraph reported in March, the Korean Financial Intelligence Unit (KoFIU) and the FSC announced a joint investigation into crypto exchanges’ corporate accounts in Korean banks, citing anti-money laundering (AML) compliance concerns.

In April, major Korean crypto exchange CoinNest’s co-founder and chief executive were detained on charges of embezzlement and fraud, for allegedly moving “billions of won” in customers’ digital assets into their personal accounts. That same month, 12 crypto exchanges were ordered to improve customer protection in their contracts.

At press time, Bitcoin is trading at an average of $8,750, down about 7 percent on the day. Ethereum is down almost 10 percent on the day, trading at an average of $690.