The Seoul Southern District Court has acquitted senior executives at Upbit crypto exchange of fraud charges.
Insufficient Evidence Against Upbit Chiefs
Delivering judgment on the matter, Deputy Judge Oh Sang-yong dismissed the 30-count criminal fraud and market manipulation charges leveled against the Upbit directors for lack of evidence.
According to South Korean media outlet Newsis, the court declared that the activities of the Upbit hierarchy were not sufficient to materially impact the spot price of bitcoin (BTC).
The prosecutors earlier argued that Upbit was trading against its customers, setting up fake accounts to manipulate market prices. According to the prosecutors on the case, the Upbit hierarchy was creating fake buy orders to artificially inflate trading activity for crypto tokens.
Numerous market reports have revealed massive spoofing and wash trading within the crypto market. Analysts say the greater percentage of trading volume data displayed by crypto exchanges in inflated.
As previously reported by Bitcoinist, South Korean authorities raided Upbit’s headquarters back in May 2018 on suspicion of being insolvent.
One of the “big four,” Upbit was the first licensed crypto exchange in South Korea. While the other three major platforms posted losses in 2018, Upbit was able to declare a profit of $123 million amid a year-long bear market for cryptos.
Bithumb, another of the big four recorded a loss of $180 million which was more than the losses incurred by Korbit and Coinone combined.
South Korean Crypto Businesses Still Under the Cosh
While the big four continue to soldier on, smaller crypto exchanges and other cryptocurrency-related businesses in South Korea are shutting down. The 2018 bear market and the increasingly stringent regulatory climate in the country appear to be dampening enthusiasm for what was once one of the most vibrant crypto markets.
On Friday, Bitcoinist reported that Bitberry — a popular crypto wallet platform, was shutting down. Smaller volume crypto exchanges are also closing down their businesses with reports stating that 97% of crypto trading services in South Korea are close to bankruptcy.
Compliance costs are also reportedly on the rise with commercial banks setting fresh hurdles for offering services to cryptocurrency exchanges.
Crypto stakeholders in the country say the current regulatory climate is choking digital innovation in South Korea. Many blockchain startups are electing to list their tokens on exchange platforms based overseas amid shrinking won-denominated trading activity in the country.
Do you think Upbit was engaging in wash trading? Let us know in the comments below.
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