Upbit Denies Intermediary Fee Allegations

Upbit, one of the largest South Korean crypto exchanges, has denied accusations of charging brokerage fees for listing tokens on its platform, challenging accusers to provide concrete proof of such occurrences.

The allegations were made by Wu Blockchain, a crypto news platform, which claimed on X (formerly Twitter) that several projects paid substantial intermediary fees to list their tokens on South Korea’s leading exchanges, Upbit and Bithumb.

According to Wu Blockchain, the fees were around $2 million and $10 million, respectively, orchestrated by intermediaries connected to Upbit’s shareholders and market makers. Some projects disclosed to Wu Blockchain that they paid intermediary fees ranging from 3% to 5% of their total token amount before successfully listing on Upbit.

Notably, Wu Blockchain reported differing experiences among the projects; three of the seven contacted stated they incurred no such fees before listing.

> SCOOP: Several projects told WuBlockchain that they paid huge intermediary fees to have their tokens listed on South Korea’s largest cryptocurrency exchanges, Upbit and Bithumb. The fees were approximately US$10 million and US$2 million respectively. The intermediaries are… pic.twitter.com/PODtooUaYd
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> — Wu Blockchain (@WuBlockchain) March 20, 2025

Upbit’s Response

In response to the allegations, Upbit issued a press release asserting that it does not permit external agencies to assist in trading support, emphasizing that all procedures are conducted directly by Upbit personnel.

The exchange reiterated that it evaluates projects through a stringent internal review based on its trading support processes, rejecting trading support under any financial compensation conditions. Upbit cautioned users and projects against companies or individuals soliciting intermediary fees, labeling them as illegal brokers unrelated to Upbit.

Moreover, the exchange requested Wu Blockchain provide a list of digital assets listed on their platform that supposedly paid intermediary fees, along with supporting evidence to aid their investigation into the claims. Wu Blockchain responded that it could not disclose this information due to source protection.

Regulatory Challenges Faced by Upbit

Recently, Upbit faced challenges with South Korea’s Financial Intelligence Unit (FIU), which cited thousands of KYC violations and identified that Upbit facilitated transactions with unregistered foreign service providers, breaching South Korea’s Financial Information Act.

As a result, regulators imposed a sanction on February 25, 2025, halting Upbit’s ability to onboard new users. New users will be restricted from deposits or withdrawals from March 7 until June 6. Upbit’s parent company, Dunamu, has appealed this decision, seeking to overturn it.

In a proactive measure, Upbit announced plans to expose six companies allegedly involved in Ponzi fraud via the platform and will limit asset withdrawals in accordance with the Enforcement Decree of the Virtual Asset User Protection Act of South Korea.

Wu Blockchain urged South Korean regulators to investigate the claims, especially regarding market markers. If the allegations concerning intermediary fees and market markers hold true, it could represent a significant setback for Upbit, necessitating substantial fines due to prior infractions.