Upbit: "Investors who deposited Refereum after May sold it before prices spiked"
Local cryptocurrency exchange Upbit has sent additional responses to the controversy surrounding the spike in the price of Refereum. “The extra deposit that occurred after the deposit suspension measure was due to the operational incompetency of Upbit, and going forward, we will make sure to strengthen the related processes,” said Upbit. However, regarding the controversy surrounding the deposit wallet, Upbit argued that nine customers who deposited after the suspension sold all of their Refereum before prices spiked. It added that it is hard to conclude that the company manipulated prices and reaped profits from the action. #“Refereum selected as an item under surveillance, applied based on internal policy” The suspicion the community raised surrounding the spike in the price of Refereum is the part where Upbit in May decided to put Refereum under surveillance and took the deposit suspension measure. “The deposit suspension measure (hiding the address of deposits, signaling that deposits are not permitted) after Refereum was put under surveillance was based on internal policy after Refereum’s CEO in May announced the risk factors of shutting down the business,” said Upbit. “However, an error occurred where the outside institutions did not instill the shutdown function for deposits made with the addresses registered as Upbit Refereum wallets. Hence, deposits were permitted and applied to the customers’ wallets.” “The repeal of the initial coin offering (ICO) is an issue that can be detrimental to the investors, so we internally decided that putting them under the surveillance category was an appropriate measure,” said the cryptocurrency exchange. However, Upbit acknowledged its lack of consideration for its customers in customer communication aspect for not posting public announcements surrounding the incident when there were no updates on the Refereum situation for more than five months.” #“After deposit suspension, 9 people deposited 52 million won in 245 steps” Regarding the deposit history following the suspension measure, which is the core of the controversy, Upbit said it confirmed the deposit of 52 million won by nine people on nine accounts from May 8 to Sept. 2 after it received calls from customers on Sept. 2 that Refereum were being deposited. “Right after we checked, we made changes to the system so that it will no longer be deposited, and the incident occurred due to fallacies in Upbit’s internal operation,” said Upbit. According to Upbit, 206 (84 percent) out of 245 incidents that happened during the period were deposits from customer A. The customer sold the entire quantity of Refereum on Sept. 3. His additional purchase of 33,000 won worth of Refereum on Upbit on Sept. 30 and sale of the entire quantity on Oct. 2 was his last transaction. The last deposit of the second biggest scale was the deposit of 1,036,709 Refereum on June 20 (worth around 660,000 won at the time), and on the same day, the entire quantity was sold, causing about 50 won of losses. The next in line in terms of deposit scale was 6,2782.5632 Refereum (worth around 36,000 won at the time) on July 2, which was the last transaction. Due to the sale of the entire quantity on that day, it faced a loss of 627 won. At the time of the deposit, there were four customers with more than 50,000-won worth of deposits. For the rest, only one-time of deposits occurred and Upbit argues that the amount was merely in the 2,000-won to 40,000-won range. It reinforced the argument that there were no deposits made after the suspension took place on Sept. 2. #Upbit denies allegations of pumping after abnormal deposits made In response to the controversy on price spikes following the abnormal deposits, Upbit denied all allegations. “What we want to express firmly about the relationship between abnormal deposits and price spikes is that the deposit that occurred between May 8 and Sept. 2 is irrelevant,” Upbit said. “During the period, all nine people who deposited Refereum made their last transactions before prices spiked on Oct. 8, and hence had no amount left in their balance. There were no customers who reaped profits due to the spike in prices,” said Upbit. A large unspecified group of Upbit customers signed contracts for Refereum transactions from Oct. 8 to 9, and only the transactions made via those channels affected the change in prices of Refereum.” Regarding the controversy surrounding profits from commissions and privileges from the extension of Refereum’s surveillance designation, the company said, “As mentioned before, Refereum’s surveillance designation and its extension is based on the process disclosed in the system of digital asset management after Upbit’s public listing, and factors like expectations for profit from commission do not affect the decision,” said Upbit. “There is no reason that Upbit would discriminate against projects based on the prospect of commission profit of 100 to 200 million won, or postpone the repeal of the ICO in the reality where trading volume may increase following a jump in prices.” About the suspicions regarding the quantity of Refereum Upbit possesses, Upbit said, “The Refereum deposited from May 8 to September 2 were about 2 percent of all Refereum distributed. Excluding the quantity withdrawn over the same period, the real change in Upbit’s holding amount is only about 1 percent.”