Crypto seeing red as UPbit gets raided
The cryptocurrency markets are awash in red today as news out of South Korea is likely the driving factor.
(Source: https://coinmarketcap.com/)
According to Coindesk, prosecuters in South Korea have raided the largest cryptocurrency exchange in the country, UPbit.
It isn't entirely clear exactly what UPbit is being investigated for as several reasons have surfaced.
First it was rumored that UPbit was basically embezzling from customer accounts and transferring coins into their own accounts.
Then later that was updated to say that Upbit was instead selling cryptocurrencies to clients that it didn't actually own.
This was the updated quote from Coindesk:
"UPbit is suspected of fraud for allegedly selling cryptocurrency to customers that it does not actually hold, according to the report. We have secured hard disks and accounting books through confiscation. Analysis is expected to take days."
(Source: https://www.coindesk.com/koreas-biggest-crypto-exchange-raided-over-suspected-fraud-report/)
On first glance that sounds bad, but it could also be something that is a part of the normal market making process.
Stock exchanges in the US routinely sell shares that they don't actually own, they do this to provide liquidity for their customers and to "keep an orderly market".
The trades are eventually settled by transferring shares between exchanges so there is no harm done.
What has gone on here is anyone's guess at this point, but the fact that the local authorities are involved probably means there was some kind of nefarious activity going on.
In general, regulators don't like to take action unless they have proof of something.
What this means going forward:
In general it shouldn't have too much of a long term impact.
Regulation among these markets was coming already and this is just another example of why it is needed.
When there is a lot of money at stake, people have proven time and time again that they need to be policed.
That being said, we could continue to see a bit of weakness in the very short term due to a customers selling out of UPbit.
Though, in my opinion, those sellers will likely eventually move their money and holdings to other exchanges and we will continue on with business as usual.
Could possibly have some effects on Steem and SBDs going forward.
One thing to keep in mind regarding Steem and SBDs is that the UPbit exchange was the largest exchange in terms of volume for both Steem and SBDs.
(Source: https://coinmarketcap.com/currencies/steem/#markets)
How UPbit being under investigation affects those two is anyone's guess.
If the exchange were to be shut down it may affect them negatively, though it being shut down doesn't seem likely to me.
UPbit has likely been responsible for some of the current premium in SBDs, though.
Stay informed my friends.
Follow me: @jrcornel
😩STEEM😫
The drop also could have had something to do with the Mt. Gox bankruptcy trustee...
Interesting that they got reported to fraud. This will be good in the short term. Crypto always recovers from FUD. I hope UPbit and the regulators get this settled out, that'd be interesting if they were actually creating fake clients to provide more liquidity. Crypto is still such a wild Wild West, a lot of manipulation and money making is occurring right now.
It stinks that Steem and SBD went so low. It's time to pick up some more Steem to power up :P. Does anyone else have a goal of getting to 10,000 SP?? At $100 for a price of Steem you will be a millionaire.
You think it goes to $100?
Yes, Steem just gets just 5% of Facebook's market cap in tandem with the same user growth, it will be worth $115 a coin. Don't be surprised if it does one day. Once people realize they can get real money from posting good content and interacting on a social media platform, the sky is the limit. Nothing is for certain though as nobody can predict the future, but I'm surely optimistic :)
Not alot of support between here and $6.4K, maybe one ledge over the edge, but that's about it.
My thoughts as well. Where do you think we go?
i bet his cousin starts shorts few minutes before he makes the transfer and it hits all medias
The Mt Gox trustee's cousin?
This is crypto normal correction.
I wondered why all the bleeding today.
Thanks for the heads up.
I think the down turn of the crypto market has to do with the value of a satoshi. As Bitcoin goes down so does the Dollar value of all cryptos. And BTC and ETH have been in sync lately. Plus this is a normal market correction. You should not expect BTC to never correct itself. Well within expected price movements.
Do prices hold up here or have further to fall?
Do you agree that it should be only short term haircut?
I wondered why sbds and steem prices depreciated now i got my answers.
That sucks in the short term, for crypto in general and steem/sbd specifically, however anyone who was buying steem on Upbit who wants steem can still get it, and this is not going to be a major issue outside of its short term impact.
I am here on steemit for the long term, $8 Steem isnt #moon, $1,000 or $2,000 Steem is #moon. That's not going to happen overnight, and what ever happened with Upbit is not going to change the trajectory of Steemit, the Steem platform or cryptocurrency.
Thanks for the post.