On June 6th, Bithumb, the second largest cryptocurrency exchange in South Korea, experienced a significant incident involving the payment of 620,000 'ghost bitcoins'. In response to concerns that this could undermine trust in the entire cryptocurrency market, Upbit, the largest exchange in the country, defended itself by asserting that all digital asset exchanges are not structurally weak. Upbit released a statement on September 9th highlighting various safety measures they have implemented since 2017 to prevent the issuance of digital assets that they do not hold.

Upbit explained that they have established a triple safety mechanism to ensure that only assets they actually possess can be distributed. They utilize a proprietary 'Proof of Reserves' system that constantly compares the actual amount of crypto held in their wallets with the balance recorded in their database, ensuring the integrity of the assets. This addresses critiques that the practice of managing assets through digital ledgers is fundamentally flawed. Upbit clarified that this method of ledger management is standard not only among crypto exchanges but also in traditional financial institutions like banks and brokers, stressing that the core issue lies in ensuring consistency between recorded amounts and actual holdings.

In light of the incident, some have suggested that limiting the shareholdings of major stakeholders in cryptocurrency exchanges is necessary to prevent similar occurrences. However, Upbit contended that they have built comprehensive safety mechanisms to prevent such incidents and stated that the recent Bithumb case, involving the distribution of a large quantity of 'ghost bitcoins', was not causally linked to the shareholding structures of major shareholders. This ongoing discourse underlines the critical importance of regulatory scrutiny and operational integrity across the cryptocurrency exchange landscape in South Korea.