According to the publication, the financial investigation team of the Seoul Southern District public prosecutors' office sent prosecutors and investigators to Upbit headquarters on May 10 and May 11 "to secure computer hard disks and accounting records".
This latest suspected fraud comes at a time of increased scrutiny in South Korea and Asia in general.
History repeats itself, and Upbit isn't the first crypto exchange on the list to have attracted the attention of the South Korean authorities.
"UpBit is now under investigation by prosecutors and is cooperating", the exchange said in a notice to clients, with reassurances that services such as withdrawals and financial transactions were unaffected.More news: Annual postal food drive is Saturday
Upbit, a subsidiary of Korean tech giant Kakao is now the fourth largest crypto exchange globally by 24-hour trade volume.
On May 13, 2018, two days subsequent to the announcement of an extensive investigation into UPbit, Ran Neuner, a producer at CNBC's CryptoTrader, visited South Korea to offer coverage of the local cryptocurrency market. The company added that services such as transactions and withdrawals were unaffected and client assets were safe.
UpBit is under investigation for transferring customer funds from their accounts to an "executive" account. "Your assets are kept secureñy in your account, so you can rest assured that you can use Upbit services".
According to CoinMarketCap.com, the broader cryptocurrency market value has fallen almost $100 billion in the past week to $380 billion.
In April, CoinNest's co-founder and chief executive Kim Ik-hwan was held on charges of embezzlement and fraud. After the bankruptcy of the now-defunct cryptocurrency exchange Mt. Gox, the Japanese financial authorities ordered the Mt. Gox trustee to sell over 200,000 bitcoins and convert it to Japanese yen.