Crypto exchange Upbit faces a string of lawsuits after coin sweeping job

[Photo by Park Hyung-ki]

Upbit’s massive cleanup campaign ahead of new cryptocurrency rule is set to trigger a string of lawsuits from coin creators, with Pica Project becoming the first to challenge the major Korea-based crypto exchange for causing massive losses from abrupt removal of its digital coin.

Pica Project, developer of Pica digital coin, on Monday filed a suit against Upbit operator Dunamu Inc. in the Seoul Central District Court to overturn the crypto exchange’s decision to halt trading of Pica. The coin developer is claiming the crypto exchange’s delisting decision is unjust.

Last Friday, Pica Project had made a preliminary injunction application against Dunamu to prevent the delisting of Pico from Upbit. The first injunction hearing is to be held on July 5.

The action comes after Upbit announced suspension of 24 digital coins including Pica, as of June 28. The crypto exchange on June 11 said that it will review 25 coins for removal and gave coin developers a week to appeal.

Upset with Upbit’s delisting decision, Pica Project exposed on Sunday that the crypto exchange demanded 5 million Pica coins, worth about 250 million won ($220,770), as “commission for listing.” It also accused the exchange for profiteering as the gift coins it demanded for promotion, however, were handed out in 3 percent while the rest was stocked for sale at higher price.

Upbit denied the claims and warned of filing a countersuit. It has reportedly hired top law firms including Kim & Chang for the fight against Pica who is represented by EYW Law.

The crypto exchange said that it has decided to delist Pica because Pica Project has circulated 200 million more coins than its plan submitted to the exchange for listing review in December last year.

But Pica Project insists it increased coin issues in line with business’s rapid growth and notified all investors.

The coin developer together with investors is said to be preparing a class action against Upbit for losses caused by delisting. Pica Project claims about 5,000 of Pica investors incurred 85 percent loss on average.

Upbit is expected to face more lawsuits from other coin developers.

Quiztok, developer of QTCON coin that was also kicked out from Upbit, is also preparing a suit. The company is currently taking the case to the fair trade commission, according to Lee Geun-woo, Quiztok executive vice president.

Earlier when GOM2 coin developer AnimalGo sued Upbit to prevent delisting, the court sided with the exchange.

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