South Korean prosecutors have raided Upbit, the country’s largest exchange which has a trade volume of over $1.6 Billion in the last 24 hours. According to a report on Bloomberg, an unnamed source who works at the Seoul Southern District Prosecutors’ Office said the raid happened on Thursday and Friday.
South Korea has been in favour of regulated Cryptocurrency exchanges like their Japanese counterparts. The government has been clamping down on illegal activities like money laundering and enforcing strict KYC laws on the exchanges. The South Korean authorities have brought in multiple laws over the past few months to regulate crypto. Some of them include completely banning Initial Coin Offering and banning minors, foreigners from trading on domestic exchanges. They’ve raided several exchanges before Upbit and even banned a few for not following the laws.
Cryptocurrency trading is immensely popular in South Korea. Most of the times, there’s a premium over average global prices because of the demand in the country. On the rise of Cryptocurrencies, Prime Minister Lee Nak-yon claimed cryptocurrencies are corrupting the nation’s youth as it could lead to illegal activities like buying drugs.
The Prosecutor’s office confirmed the raid and said “We have secured hard disks and accounting books through confiscation. Analysis is expected to take days.”
UPbit has not been accused of anything yet. This might just end up being an investigation where the Prosecutor’s office finds no wrong doing. But this has already had an effect on the market. Bitcoin, which was trading just above $9,000 lost $300 as the news broke and is currently trading at $8,760. The market lost more than $30 Billion. But we do not expect the effect to last long and the market would rebound in the weekend since no accusations have been made against the Upbit yet.