‘No Man's Land’ Upbit Disclosure... Is It Okay Even If Blog Content Is Posted?

Incorrect Information and Typos Also Published in Disclosures
Virtual Currency Market Shaken by Disclosures but Lacks Proper Regulations

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[Asia Economy Reporter Gong Byung-sun] It has been revealed that the investment details of the cryptocurrency GoMoney2, which was suspended from trading on the domestic cryptocurrency exchange Upbit due to false disclosures, are full of loopholes. With no proper cryptocurrency disclosure system currently in place, there are calls for strengthening Upbit’s disclosure verification function.

On the 16th, AnimalGo Co., Ltd. announced on the domestic cryptocurrency exchange Upbit that it had secured investment from the cryptocurrency asset platform Celsius Network, but this was found to be a false disclosure. As evidence of the investment, they cited the fact that GoMoney2 was stored in Celsius’s hot wallet (an internet-connected cryptocurrency wallet), but Celsius Network denied having made any investment. Subsequently, Upbit terminated its trading support service for GoMoney2 on the 18th.

Upon investigation, GoMoney2’s disclosure content was found to be riddled with flaws. They copied and posted a Naver blog post, which lacked professionalism, as their disclosure content. Even basic facts were incorrect. The disclosure stated that Celsius Network was managing $4 billion (approximately 4.52 trillion KRW), but according to the Celsius Network website as of the 19th, the current asset management scale is over $10 billion. Furthermore, typos were copied verbatim into the disclosure content.

Additionally, GoMoney2 cited the Naver blog post without the permission of the blog operator. The blog operator, Mr. Kim, said, “I have no relation with GoMoney2 and this is an absurd situation.”

It appears that investors have suffered losses due to this false disclosure. According to the domestic cryptocurrency exchange Bithumb, when the false disclosure was posted on the 16th, GoMoney2’s price nearly doubled to about 70 KRW. However, as of the 25th, it fell to about 16 KRW, a drop of approximately 77% over nine days. Due to the false disclosure, GoMoney2 can no longer expect any price increase.

Upbit has had disclosure issues before. Cryptocurrency issuers exploit a market that reacts sensitively to disclosures. Bora Coin, listed on Upbit, announced on the 18th of last month that its operator, WayToBit, had been incorporated into a Kakao Games subsidiary. Bora Coin surged 433.21% on that day alone. However, since the content was not significantly different from the disclosure made on December 17 of last year, it became embroiled in a double disclosure controversy.

Nevertheless, Upbit maintains that it will continue with minimal disclosure verification. An Upbit official explained, “We conduct minimal verification to protect the business operations of companies as much as possible,” and “Even if it is a blog post, Upbit’s policy is to publish the disclosure content sent by the company as is.” In fact, according to Upbit’s project disclosure-related documents, they do not verify or guarantee the disclosure content and do not take responsibility for investment outcomes resulting from it.

Even if Upbit is negligent in disclosure verification, there is currently no proper system in place. The Specific Financial Information Act (Specifically, the Act on Reporting and Using Specified Financial Transaction Information) came into effect on the 25th, but it only regulates the business activities of cryptocurrency exchanges related to money laundering. The Financial Intelligence Unit explained, “Cryptocurrency exchanges are not included under the Capital Markets Act, so unless a sector-specific law is created, it is difficult to establish a clear system for cryptocurrency disclosures.”

Therefore, there are calls for a clear disclosure verification system. An industry insider said, “Upbit clearly bears responsibility for the disclosure operation in the GoMoney2 incident,” and “A clear disclosure verification system is necessary for the cryptocurrency market to gain trust and develop.”

This content was produced with the assistance of AI translation services.