Upbit, South Korea’s largest cryptocurrency exchange, has recently come under fire for allegations of charging intermediary fees for token listings. The controversy started when Wu Blockchain, a well-known digital asset news source, claimed that several projects had paid significant sums to secure listings on Upbit and its competitor, Bithumb.
According to Wu Blockchain, projects reported paying intermediary fees of up to $10 million to parties associated with Upbit and market makers. These claims have caused a stir in the crypto industry, prompting Upbit to issue an official statement refuting the allegations.
In their statement, Upbit categorically denied accepting any form of monetary compensation in exchange for listing a token. The exchange emphasized that it follows a strict internal evaluation process to determine whether a digital asset meets the criteria for trading support. Upbit also warned users against fraudulent brokers who claim to guarantee listings and called on Wu Blockchain to provide evidence to support their claims.
Wu Blockchain’s report alleged that some projects had paid intermediary fees ranging from 3% to 5% of the total token supply or made direct payments amounting to millions of dollars to secure listings on Upbit. While some projects confirmed making such payments, others denied engaging in fee-based negotiations.
The report also suggested that the intermediaries involved in these transactions had connections to Upbit’s shareholders and market makers. However, Wu Blockchain declined to disclose specific details or reveal the identities of the projects involved, citing the need to protect their sources.
These allegations come at a time when Upbit and other major South Korean crypto exchanges are facing increased regulatory scrutiny. Earlier this year, Upbit and Bithumb were fined a total of $2.4 million for platform outages that occurred during the “Martial Law Day” crisis in December 2024, which caused Bitcoin’s price to plummet on domestic exchanges.
Regulators have since demanded that exchanges strengthen their technical infrastructure, with the Financial Supervisory Service conducting on-site inspections to ensure compliance. Upbit is also facing potential sanctions from the Financial Services Commission for over 700,000 Know Your Customer violations.
As the listing fee allegations and KYC violations continue to be scrutinized, Upbit’s operational integrity is under the spotlight. While the exchange has denied all claims of pay-for-listing schemes, ongoing regulatory attention underscores the need for further investigation into its practices.
In conclusion, Upbit’s denial of the listing fee allegations and challenge to Wu Blockchain to provide proof highlight the growing complexity of regulatory pressures facing South Korea’s cryptocurrency exchanges. The industry’s response to these allegations will likely shape the future of crypto trading in the country.