Upbit Continues To Freeze Foreign Crypto Withdrawals Amid Regulatory Uncertanities

Sateesh Swaminanthan
I am a techsavy, otaku and Crytogeek. loves to talk and write about latest tech, new anime and happenings in Cryptosphere.
  • Upbit is a South Korea based cryptocurrency company launched on October 24, 2017.
  • South Korean exchange Bithumb’s 70$ million dollar tax fine from South Korean Tax collection agency.
  • Upbit issued an announcement that the company made changes in their KYC.

South Korean Cryptocurrency Exchange: Upbit

Upbit is a South Korea based cryptocurrency company launched on October 24, 2017, partnered with American cryptocurrency exchange Bittrex. The company became a top cryptocurrency exchange globally within two months of its launch. The company currently ranks first in the world in daily transactions and won 3 ISO information security certifications.

As the company is known for its feats it has known for the worst hack that happened on November 27, 2020. Upbit was hacked for 342,000 ETH and it has been speculated by the Chinese investors that they froze the withdrawals while the hack was being investigated but now the accounts for the natives seem to work for withdrawals, they question their speculations as they don’t seem to get withdrawal options as Koreans.

Foreign investors are furious!

Now the theory foreign investors came up with is maybe the hack was worse than it is actually reported and the account freeze is related to the Fellow South Korean exchange Bithumb’s recent 70$ million dollar tax fine from South Korean Tax collection agency and Victims are assuming that their funds may be getting used to paying taxes to avoid the same situation as Bithumb.

The other theory which also can be the case is it has something to do with the Upbit executive’s recent prison sentence for fraud. Song, an Upbit Senior Executive, he and his gang of accomplices used a fake ID to fake a trading volume of 122 billion Korean Won on the exchange.

Foreigners were still in dark not knowing why their accounts got froze and the Upbit were clearly not addressing any of their questions regarding that.

What Upbit has to say now?

On February 20 Upbit issued an announcement that in mid of December 2019 the company made changes in their KYC (Know Your Customers) policy to fully comply with South Korea’s “Special Financial Law” and “Financial Action Task Force” on crypto assets.

At that time, it was open to all foreigners who passed the KYC and provided related documents. In late December it learned from media reports that the Korean internal revenue service imposed a tax on foreign customers who are withholding tax on the cryptocurrency exchange.

In response to that guidelines, Upbit implemented an additional procedure to verify the residency status of the foreign nationals as defined in the Korean tax law and working closely with tax authorities to determine the applicable standards for reviewing tax standards in other countries with tax experts.

But the lack of clear guidance on what exact standards and tax rates to determine it is currently unable to resume the cash withdrawal services for foreign users.

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