According to multiple South Korean publishers, authorities paid a visit to the Gangnam headquarters where a very popular cryptocurrency exchange Upbit is headquartered. The “Raid” caused authorities to confiscate materials relating to the investigation of the firm.

The trading platform is suspected of fraudulent activity over inaccurate representation of the amount of crypto it has in possession. It appears that formal charges have NOT been filed as of this time. The exchange has publicly made a statement, that operations are normal and assets are kept secure in users’ accounts.

Current laws in South Korea mandate that licensed residents and local businesses which transfer over $3,000 across the country’s borders must disclose certain information to tax authorities, including reason for the transaction. Also, overseas transfers in excess of $50,000 on an annual basis also must be reported.

As of Sunday May 13, 2018, The Korea Times reported that South Korea’s Financial Services Commission (FSC) is “looking into cryptocurrency exchanges’ corporate accounts opened in local banks.” The FSC rep added, “Our latest findings show that the domestic exchanged faked its balance sheets and deceived investors. The FSC is checking UPbit’s computer system with prosecutors and the Financial Supervisory Service (FSS) to audit their holdings.”

As a founder of a U.S. based blockchain company, it can be a challenge some days in today’s uncertain regulatory climate. As most exchanges are based overseas, consumers trust volume and reputation to guide preference for listing. We all remember Mt. Gox; as an early adopter of Bitcoin and now having a fiduciary duty to my company, this incident always swirls in the back of my mind. At the moment, regulations do not look favorable, but IAM confident the U.S. will take the lead with the help of innovators.

Dealing in the unregulated, “Wild West” of crypto has definitely shown many challenges. My network of Founders have shared some horror stories; potentially multi-million deals on Skype that have terms changed constantly by mood of “business managers” and the reliance on screenshots for reminder of prior terms. Can you imagine going to your mechanic, he/she says it will be $20,000 to change your oil and it will be done in 3–4 months? This is the experience of many Founders for some centralized exchanges that have even recently been “cited” by online communities.

Decentralized exchanges (DEX) do offer another/better option, but if we want crypto to be a multi-trillion-dollar market then there will have to be oversight and a categorical approach for listing your asset (token). Similar to an IPO, there are costs and guidelines that are expected, reasonable and must be met before listing on the NASDAQ. Not have a fee that changes by how much money the listing provider needs that month or the raise of the individual ICO.

I believe that the Upbit “Raid” is the first of many to come, across all nations. We are designing a compliant tool that can help exchanges serve their customers better and not worry about regulators. Bridge will provide the plug-and-play solution for KYC/AML, so exchanges can do what they do best.