South Korean prosecutors began a two-day search of Upbit

South Korean prosecutors began searching the Seoul offices of Upbit on May 10, 2018, opening a two-day evidence seizure focused on suspected fraud at the country’s largest cryptocurrency exchange. Korean reports published on May 11 said the Seoul Southern District Prosecutors’ Office collected computer records and accounting books on May 10 and May 11 while examining whether the platform had represented that it held digital assets or wallets it did not actually possess.

That was an investigation, not a finding of guilt. The distinction matters because the surviving contemporaneous record described suspicions about Upbit’s internal ledger and custody representations, while Upbit told customers that trading, deposits and withdrawals were operating normally and that customer assets were safe.

Why the search mattered

Upbit sat at an important junction between South Korea’s retail trading market and the wider digital-asset economy. A search directed at an exchange’s books and systems raised a basic market-structure question: when customers bought an asset displayed in an exchange account, did the operator control the corresponding asset, or was the customer seeing only an internal claim?

That question was especially consequential in 2018 because centralized exchanges commonly matched trades on private databases. Blockchain records could show movements to and from addresses, but they could not, by themselves, prove how an exchange allocated pooled holdings among customers. Investigators therefore needed company records, wallet data and accounting evidence to test the allegation.

Contemporaneous Korean coverage attributed the inquiry to suspected fraud and falsification of private electronic records. One report said prosecutors were examining circumstances from Upbit’s early operations and whether the exchange had sold more cryptocurrency than it held. Those were allegations reported from the investigation, not verified balance-sheet facts. The reports did not publish the seized records, a wallet inventory or a reconciliation of customer liabilities against assets.

What was known on May 10

The strict chronology is unusually important. The search began on May 10, but the public reporting and Upbit’s customer notice surfaced on May 11. A reconstruction tied to May 10 can therefore establish that investigative action started on that date; it cannot plausibly claim that traders had already received the news during the May 10 session.

Reuters, citing Yonhap, reported that prosecutors searched Upbit on May 10 and May 11 and that the exchange sent clients a note promising cooperation. Korea Economic Daily separately reported that the Financial Investigation Department 2 of the Seoul Southern District Prosecutors’ Office conducted searches on both dates and seized hard drives and books. The overlap supports the occurrence and timing of the search, while the absence of a surviving public warrant or prosecutor release limits what can be said about its legal scope.

Market context without a causal claim

Kraken’s exchange-specific report labeled May 10 recorded bitcoin at $9,076, down 2.22%, with $66.5 million of BTC trading volume on Kraken; it reported $187 million across all markets on the venue. These are Kraken’s own daily figures, not a global closing price or consolidated market volume. The surviving report does not provide enough detail here to establish a universal day boundary across venues.

Those figures provide contemporaneous context only. Because the Upbit search was publicly reported on May 11, the May 10 Kraken move should not be attributed to the investigation. Any claim that the search caused the May 10 decline would reverse the observable news chronology.

The event-day takeaway

The verified development on May 10 was the start of a prosecutorial search into whether a major exchange’s displayed customer positions were backed by assets it controlled. The unresolved issue was proof: no seized ledger, asset-liability reconciliation or official charging document was public on May 10. The responsible event-day conclusion is therefore narrow—authorities had escalated scrutiny from general exchange oversight to evidence gathering at Upbit, while the underlying custody allegation remained unproven.