Urbit, the biggest South Korean crypto exchange, was raided by the local authorities in May, under allegations that its balance sheet was insolvent due to inflated trading volumes. After South Korea’s Financial Services Commission (FSC) along with the Korea Financial Intelligence Unit (KFIU) seized documents and hardware from UPbit, and carried out an audit of the exchange, UPbit finally came out clean in an audit report and proved the exchange had 100 percent of the amount its balance sheet demonstrated.
Four days after the raid, the UPbit team hired Yoojin, one of the largest accounting firms in South Korea, to validate the holdings of the exchange and the company’s balance sheet. Yoojin officially concluded that the holdings of UPbit exactly matched the amount of user funds listed on its balance sheet:
“Since early 2018, UPbit created snapshots of its multi-signature wallets and funds stored within them for auditing purposes. Yoojin accounting firm, a major accounting firm based in Seoul, confirmed that all of the funds on the UPbit platform match the cryptocurrency holdings of UPbit stored in its multi-signature wallets.”
According to the recent report, UPbit is in fact storing the correct amount of Bitcoin and other cryptocurrencies. Dunamu, UPbit owner, emphasized in the report that UPbit holds 100 percent of user funds and 27 percent more than the cryptocurrency holdings of its investors, which is more than enough to reimburse every user on the platform.
Dunamu CEO Lee Seok-woo said:
“UPbit currently has the exact amount of money held by the platform’s investors along with additional funds, more than enough to compensate every investor. Hence, UPbit is able to process withdrawals for customers upon the request of its customers and the exchange will continue to release audit reports on a regular basis to prove its solvency.”
Upbit is the largest cryptocurrency exchange in South Korea. Being a leading exchange within the domestic market as well as the global one in terms of trading volume, Urbit is processing more than $700 million per day. Dunamu launched the platform in October 2017 after entering a partnership with the US-based cryptocurrency exchange Bittrex.
Just few months since its launch, Upbit became the country’s main cryptocurrency trading operator, now accounting for more than half of the domestic trading market. In March of this year, the exchange announced launch of the country’s first domestic digital currency index called UBCI (Upbit Crypto Index), with the aim to make it easier for traders to analyze current trends within the market.
Earlier, investors were afraid of Urbit collapse, as many exchanges were hit by a succession of hacks. Last December, South Korean crypto exchange Youbit filed for bankruptcy following a second cyber attack that drained 17% in assets from its balance sheet. In June, crypto exchange Coinrail was hacked, losing nearly 30% of its coins and sustaining an estimated $40 million in losses. At the same time, Bithumb was hacked, leading to a freeze on withdrawals and deposits.