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Just as the cryptocurrency market was beginning to recover from last weekend’s $20 billion market cap loss, cryptocurrencies took another major hit this afternoon.

Bitcoin is down more than $600 dollars from yesterday’s high of $9,396, and is currently trading at $8,734. Bitcoin Cash, now trading at $1,359, has taken the biggest hit at the time of writing, plunging over 18% in the last 24 hours. EOS and XRP are also suffering steep losses, with their prices down 17% and 16%, respectively.

Cryptocurrency Market Data by Coinrate.com
Cryptocurrency Market Data by Coinrate.com

Upbit exchange suspected of fraud

The market’s current decline coincides with news that South Korea’s most prominent cryptocurrency exchange, Upbit, is under allegations of fraud. According to local media outlets, a financial investigation team from the Prosecutors’ Office of the southern district of Seoul raided Upbit’s headquarters on May 10, resuming their search on May 11.

The exchange is suspected of falsifying records to appear that it holds more cryptocurrency than it actually possesses while selling nonexistent cryptocurrency to customers. Other reports indicate that the company has been transferring funds from customer accounts to a separate account possibly belonging to an Upbit executive. Investigators said they have confiscated several of the exchange’s hard disks and accounting records.

Given that Upbit is the world’s fourth largest cryptocurrency exchange by volume, the entire cryptocurrency market is feeling the impact. In response to news of the raid, South korean traders withdrew large amounts of cryptocurrencies from Upbit, sending the market into a downward spiral. However, trading volume seems to be climbing back up, suggesting that cryptocurrencies could make a comeback soon.

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