Crypto Crisis? Upbit Faces Investigation as Bitcoin and Ethereum Prices Plummet

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Upbit is the largest crypto exchange in the Asian financial superpower of South Korea. The crypto exchange supports 214 coins and 372 trading pairs. It has nearly 5.72M monthly visits and a 24-hour trading volume of $1,184,877,458. In the last 24 hours, the exchange has experienced a 5.6% drop in its trading volume.

The latest decline coincided with a political attack launched against the exchange by South Korean Democratic Party lawmaker Lee Kang-il, who raised concerns over the growing monopoly in the country’s crypto landscape – dominated by Upbit. Not only the exchange but also the entire cryptocurrency sector has felt the impact of the political stance opposing the monopolistic tendency in the South Korean crypto sector. Here is what you should know.

SK FSC to Investigate Upbit’s Monopoly 

In response to lawmaker Lee raising the issue during the National Assembly State audit, the South Korean Financial Services Commission released a public statement addressing the crypto monopoly concern. Kim Byung-hwan, the FSC chairman, recognized the seriousness of the issue.    

Upbit and K-Bank’s Controversial Financial Ties

Lee also raised concerns about the close financial alliance between K-bank and Upbit. He criticized the bank’s decision to offer a 2.1% interest rate on Upbit deposits despite K-Bank’s operating profit margin being less than 1%. The FSC chairman promised to address all the concerns comprehensively through the Virtual Asset Committee. 

What’s the Response of Upbit 

The cryptocurrency exchange has recently made strides to comply with the South Korean crypto regulation framework. In July, it launched effective measures to prevent insider crypto trading, in line with the Virtual Asset User Protection Act. 

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Cryptocurrency Market in Trouble? 

Earlier in 2018, when an investigation was launched against certain top Upbit executives over fraud allegations, the cryptocurrency market suffered a bitter fall. The latest signals from the market indicates a repeat of the 2018 scenario. 

Bitcoin has dropped 2.5% in the last 24 hours. On October 6, it peaked at $62,817. Last day, but yesterday, the price fell from $62,146 to $60,628. Currently, the market is struggling to break above the previous day’s opening price, with BTC standing at $61,068. 

The situation in the Ethereum market is not different. On October 6, the price of ETH was $2,440. On October 9, the market slipped from $2,440 to $2,407. Currently, the market is struggling to recover, with ETH still priced at $2,407. 

The entire cryptocurrency market has experienced a 3.3% drop in total market cap in the last 24 hours.

In conclusion, the upcoming regulatory review in South Korea against Upbit could have significant consequences for the global crypto market.