Crypto Exchange UPbit Comes Clean After Audit

South Korean crypto exchange UPbit released data from an audit it has ordered to independent accounting company, proving all required funds are in place.

One of South Korea’s leading exchanges, UPbit, is fully solvent, with reserves ratio standing at 103% and cash ration – at 127%, according to a report conducted by Yujin Accounting Corporation, one of the country’s leading accounting firms, UPbit announced earlier in August.

The audit was ordered by UPbit to prove its credibility after in May local authorities broke into the company’s offices and seized servers. The raid – one of several for UPbit - came amid various suspicions, from balance sheet to price manipulation.

UPbit is owned and operated by Dunamoo, a subsidiary of South Korea’s leading internet conglomerate Kakao, which has multiple other ventures.

“We hold excess amounts of cryptocurrency and cash reserves than what we have to pay our customers,” said Dunamu CEO Lee Seok-woo at the statement announcing the audit results.

“This indicates we are able to pay whenever our customers wish to (withdraw).”

South Korean cryptocurrency enthusiasts have been hit by a wave of scandals surrounding the most popular exchanges. YouBit got hacked in December and later filed for bankruptcy, after losing 17% of its client coins.

More recently, Bithumb was also breached and even stopped accepting new clients due to alleged banking issues. Furthermore, Coinnest executives were questioned in April on allegations of stealing client funds.

While South Korean authorities have been fairly diligent in following signals and investigating various exchanges, an official response to the audit hasn’t been released yet. Looking at the past few months, a hack seems more likely to bring the demise of a given exchange than an inside job.

However, it the current regulatory framework across most jurisdictions makes it rather hard to distinguish between a hostile intervention and a well-orchestrated inside job, and South Korea’s Financial Services Commission requests quick adoption of new rules.