Upbit Exchange Review 2023 - Is It Safe?

Upbit is the biggest Korean cryptocurrency exchange. Although the platform is Korean, the headquarters are situated in Singapore. The exchange is famous for its huge number of trading pairs (over 150).

Is Upbit safe to use? Should you really use it? Read this review and decide for yourself.

1. General Facts
2. Registration and Security
3. Upbit Fees
4. Upbit Listing Process
5. Is Upbit Safe?

General Facts

Upbit was launched in October 2017 by Song Chi-Hyung. It took only three months for the platform to become the most successful cryptocurrency exchange in Korea. This success can be partly explained by cryptocurrency hype in late 2017 and by the fact that Upbit has quite influential partners both in Korea (Dunamu and Kakao Corp.) and abroad (Bittrex). The design of both desktop and mobile versions of the Upbit application reminds of the Kakao Stock app. It is possible to say that in some way this platform is a Kakao Stock for cryptocurrencies. The interface of the exchange is often regarded as user-friendly and convenient.

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For a long time, registering on Upbit was a problem for non-Korean residents because the interface had no English language and registration required the use of personal KakaoTalk or Kakao Pay account. Such requirements were creating serious limitations for the further growth of the platform. Now Upbit has a "global" version that doesn't require the use of the Kakao accounts and has an English language interface.

Unlike other big exchange platforms, Upbit doesn't provide users with the functionality of leveraged trading. What it has to offer are the well-developed news channel and analysis tools. The users can set customized notifications that can help them stay tuned.

The exchange doesn't support fiat currencies with the exception of the South Korean Won. Won can be deposited or withdrawn via Korean bank accounts. If we speak of the supported cryptocurrencies, the list includes almost all of the top 100 coins by market cap and several other coins.

There's no Upbit API on the official website but an unauthorized API for automated maintaining the Upbit account and placing orders exists on the web.

Another fact that should be considered by the potential users of Upbit is that in December of 2018 several officials of the company were indicted due to the alleged fraudulent activity. Upbit is still under investigation. Allegedly, the management of the company was placing false orders on the exchange. Despite this, the company continues its growth. Needless to say, that platform denies the accusations.

Registration and Security

Upbit can be downloaded both from the App Store and Google Play. The users need to perform ID verification due to the requirements of the Korean laws. The process requires providing high-resolution photos of the user with the set of original documentation. The residents of the US can't trade on this exchange due to the complex regulatory rules of this country. 

When the registration is complete, it's better to set the security measures to guard the account. Skipping this step can result in the disappearance of the assets. Cryptocurrency platforms of all kinds are often getting hacked, login credentials of users get stolen and used for thefts of their coins. Happily, Upbit is believed to have excellent security means.

Besides the strict identity verification, Upbit provides protection options that prevent withdrawals of funds by the third party and unauthorized logins. One of these options is a fund password, a code set by the user and requested in the moment of each withdrawal of money. Adding this code is impossible without additional verification of the identity so the hackers cannot add this code in the case of hacking.

Another security measure is quite standard (although there are still platforms that don't provide it), it is 2-factor authentication. It is an additional security layer besides the username and password. The username and the password can be obtained from the distance but the passing 2-factor authentication requires access to the user's mobile device which cannot be obtained via hacking. In order to set up 2fa, the user needs to download a special app for authentication and scan the Upbit QR-code with it. As soon as the code is scanned, the app starts generating temporary short passwords for the Upbit account (every code expires in 30 seconds). Without this code, no one can enter the account or perform certain actions on behalf of the user. The only way to get this code is to open the app on the user's device.

Upbit Fees

Like many other exchanges, this platform doesn't charge any fees for making deposits. It collects the same fee from takers and makers (those who take the posted orders and those who create and place these orders increasing the exchange liquidity). For Upbit users, trading fee is 0.139% which is quite average or even below average in comparison to other cryptocurrency exchanges. Upbit Global (Singapore exchange) charges users 0.25% (both takers and makers) which is rather slightly above the average trading fee (it is fair both for limit, market, and stop-limit orders). A transaction fee is paid by the buyer.

Sometimes, the exchange does discounts for certain operations. To see the actual current fee one needs to proceed to Order Screen in the Exchange tab.

The withdrawal fees are flat and different for each cryptocurrency. For instance, in the case of BTC withdrawal, Upbit charges users with a 0.0005 BTC fee, while the withdrawal of ETH costs 0.01 ETH. The withdrawal of Ripple costs 1 XRP, 0.01 LTC is charged for the Litecoin withdrawal, etc. The users having several Upbit accounts can withdraw the coins from one account to another for free via the so-called Lightning Transfer. Such transactions are quick but are not associated with the blockchain.

Regarding the fact that most of the Korean exchanges are quite expensive, Upbit turns out to be rather a cheap one in the area. Flat withdrawal fees allow saving some money through withdrawing in big amounts. Potential users should be aware of the several verification levels some of which have limitations of the daily withdrawal sum.

Upbit Listing Process

Listing on the Upbit exchange happens only with the participation of Bittrex, the Western partner of the Korean exchange. The listing request link on the Upbit official website leads to the Bittrex website. There's no way the listing of new currencies can be requested besides the participation of Bittrex. The website warns that the situation when the exchange can contact the team behind this or that crypto asset and demand to pay some listing fees is impossible. Any such actions are conducted by the fraudsters impersonating the representatives of the Upbit exchange.

Is Upbit Safe?

Besides the mentioned safety measures such as 2-factor authentication, fund password, and strict identity verification, the accounts and servers are guarded by the advanced technologies. For example, the users' assets are protected by the multi-signature algorithms of the BitGo wallet which is regarded as one of the most secure cryptocurrency wallets to date. One can only imagine the experience in maintaining the safety of the user data Kakao Corp. has. Its messenger is used by dozens of millions of people. It is widely considered that partners from Kakao help Upbit a lot in the protection of the platform, money, and user data. There were no known cases when the platform suffered a successful hacking attempt. North Korean hackers were trying to get control over the Upbit users' accounts through phishing emails, but this attempt turned out to be a failure.

The fact that Upbit does require KYC excludes a significant amount of malicious activity. The exchange is monitored real-time 24/7 and if the security team finds any suspicious activity associated with a certain account they are free to temporarily block withdrawals of funds for the account. Of course, such a practice can lead not only to the advanced security level but to the false suspicions that can result in the outrage by users. That's something many of us know thanks to the security methods traditional banks use in order to provide security. Such situations are typical for centralized platforms dealing with money.

There are complaints on the Internet that the support team is not responding for extended periods of time and people wait with blocked withdrawals and cannot do anything. Of course, some of these angered people accuse Upbit in being a scam here and there. That's something that happens to any cryptocurrency platform with orderless customer service. People waiting for their problems to be solved are starting to believe that they were scammed.

What is more concerning is the alleged participation of the company executives in wash trading. According to prosecutors, the company officials have obtained around 150 billion won (or $133.7 million) in fake orders created on the Upbit exchange. It means that not only the intentions of the company officials might not be very fair, but also, it drops shadow at the reported Upbit trading volume. It may turn out that this volume is boosted by fake orders. It seems that the trust of the general public wasn't destroyed by this case, but such an accusation raise concerns and may lead potential users to think twice before joining this exchange.

Combined with the accusations in a badly operating support team such alleged fraud can make us think that using Upbit is not that safe despite the excellent protection measures that were mentioned above. Nevertheless, the exchange keeps on working and people on social media sincerely support this project.