Investors Make ‘Dutch Auction’ Complaint against Crypto Exchange Upbit (UPDATED)

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Investors have made an official complaint to a South Korean financial regulator about crypto exchange Upbit’s so-called “Dutch auction” listing strategy, claiming that recent listings amount to “back-door” initial coin offerings (ICOs). (Updated on September 15: updates in bold).

Per media outlet Paxnet, a group of crypto investors has lodged an official complaint with the Financial Services Commission, the nation’s top financial regulatory body, about Upbit’s recent token listing activities.

They allege that the company is conducting Dutch auctions for newer, unlisted coins on its Jakarta-based Upbit Indonesia platform as part of a concerted strategy in coordination with its domestic platform.

A Dutch auction involves a process whereby bidding for a coin starts at an initial, fixed price. This price is then reduced by a fixed amount at timed intervals – until no tokens remain or the price hits the issuer’s pre-agreed price floor.

The group of investors claims that tokens sold in Dutch auctions on Upbit Indonesia are then typically listed on Upbit Korea “two or three days later” – and that the exchange is now doing so “on a weekly basis.” This has had a significant influence on price, the investors allege.

In their complaint, the investors wrote,

“The complaint asserts that the price surveys conducted in Upbit Indonesia are initial coin offerings, which is inaccurate. Upbit Indonesia is not issuing new digital assets or profiting from sales. All proceeds from the price surveys are in the process of being redistributed through user events. Plus, Upbit (Korea) and Upbit Indonesia have separate listing criteria. Listing in one exchange does not automatically lead to listing in the other. That is not possible due to differing local guidelines,” an Upbit spokesperson told Our.

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