UPbit is suspected of fraud for apparently selling cryptocurrency to customers that it does not hold. The suspicion led to a raid on the largest cryptocurrency exchange in South Korea.

UPbit is one of the largest cryptocurrency exchanges in the world. It hosted about $1.6 billion of cryptocurrency trades in the past 24 hours, making it the largest in South Korea and the 4th largest in the world.

UPbit’s head office located in the Gangnam-gu district was searched by investigators from the Prosecutors’ Office of the southern district of Seoul.

The Prosecutors’ Office released a statement saying:

“We have secured hard disks and accounting books through confiscation. Analysis is expected to take days. “

When asked for a comment, an UPbit representative said-

“At this time, I cannot answer anything about this seizure.”

The Exchange’s support website states-

“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.”

UPbit is a cryptocurrency exchange which has followed a very different path, which was seen last year in December. UPbit refused to be part of other South Korean exchanges in support of self-regulation.

Social media has been flooded with reasons for the sudden impact in the crypto markets, with UPbit topping the list as being the main reason for the sudden fall by over 15 percent.

The cryptocurrency industry has been on the check in South Korea due to illegal activities such as money laundering. Already several smaller crypto companies and ICO’s have been raided. Last month, in April another major Korean crypto exchange, CoinNest’s co-founder and chief executive were detained for fraud. They were suspected of moving billions of won in customers’ digital assets into their accounts.

Ever since the detaining last month, 12 crypto exchanges have been asked to improve customer protection.

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