Upbit is a crypto exchange from South Korea that launched on October 24, 2017.
The company was led by Chi-Hyung Song, the CEO of the company, and Sirgoo Lee, who was the CEO of Dunamu, the parent company.
Not long after, the Upbit exchange started receiving a very high trading volume, positioning among the top 10 crypto exchanges in the world based on 24h trading volume.
Also as a part of their efforts, they received certifications from Korea Internet and Security Agency for Information Security Management System(ISMS).
However, not all went great.
The first raid on Upbit
On May 10, 2018, the main office of Upbit was raided due to fraud allegations.
KIU, FSC, and Seoul Police entered the offices of Upbit at 10 AM, suspecting that Upbit doesn’t hold the quantity of funds it reported.
The Upbit team however published their own audit, trying to clear the suspicion of fraud from their names.
A formal charge of Upbit executives
On December 21, 2018, 3 executives from Upbit got charged by the South Korean prosecutors.
The executives allegedly made fraudulent transactions in 2017, making fake orders totaling around $226.2 billion.
It was suspected that they did this in order to fake the trading volume of the Upbit exchange, thus attracting more users to their platform.
Apart from that, they got accused of selling 11,550 Bitcoins(worth around $120 million) to their customers at inflated prices.
The prosecutors asked for a 7 year fine in prison for the Upbit executives, as well as to order them to pay around 1 billion WON.
A clearing of fraud from Upbit
However, on January 2, 2020, the charges got dismissed on the grounds of lack of evidence.
Even though prosecutors accused Upbit of creating fake orders and inflating prices, Deputy Judge Oh Sang-Yong dismissed the case based on a lack of evidence to support the prosecutor’s story.
The Upbit Ethereum hack
On November 27, 2019, Upbit lost 342,000 ETH, worth about $48 million.
The funds were, over a single transaction, transferred to an Ethereum wallet with the address of 0xa09871AEadF4994Ca12f5c0b6056BBd1d343c029.
The investigation has later shown around 815 wallets trying to cash out the funds, mostly through Bitmax, Binance, Okex, and Huobi exchnages.
Of course, the exchanges like Binance managed to identify and freeze many of the hacker funds, however not all of them got recovered.