[Exclusive] Controversy Over Private VIP Event for Virtual Assets... Upbit and Bithumb Claim 'Never Held'

Image of Private VIP Event. Source=ChatGPT Generation

At the end of August, a heated debate erupted in the market regarding the sudden surge in trading volume of the virtual asset (digital asset) exchange DigitalX. It was revealed that a private VIP event was behind the sudden increase in trading. While some analysts suggested it could be an industry practice, it has been confirmed that major exchanges have not held private VIP events in the past three years. This has become a specific issue for individual exchanges.

In particular, DigitalX has garnered attention for its significant increase in market share, as it is a newly launched exchange that changed its corporate name after Mirae Asset Group acquired 97% of the shares of the virtual asset (digital asset) exchange Korbit in August. On the 16th, following the corporate name change, the service name and logo were also completely revamped to 'DigitalX'. examined why this exchange chose such a strategy and what the issues were.

According to materials received by Representative Cho Jung-hoon from the Financial Supervisory Service on the 18th, in response to a question about the status of private trading events for VIPs over the past three years, Dunamu (operator of Upbit), Bithumb, and Streami (operator of GoPax) responded that "there have been no records of such events."

In contrast, Coinone, an exchange that recently received equity investment from Korea Investment & Securities, stated, "We cannot submit information on private events as it is sensitive business information that could reveal our marketing and sales strategies." DigitalX, acquired by Mirae Asset Group, also refused to provide specific information, citing reasons of protecting trade secrets and operational confidentiality.

Surge in RLUSD Trading

The controversy over the private VIP event began when DigitalX's trading volume suddenly increased at the end of August. On August 24, the trading volume of DigitalX reached 330.2 billion KRW, more than ten times the previous weekday's volume of 29.1 billion KRW on August 21. The reason was the stablecoin RLUSD. On August 24, RLUSD accounted for 91.39% of DigitalX's total trading volume. One digital asset shook the entire trading volume of an exchange.

Initially, the market attributed this surge to the implementation of zero trading fees starting at 9 AM that day. The trading volume of RLUSD within DigitalX had previously reached as high as 56.56% (on August 17), indicating its significant influence within the exchange.

However, it was later revealed that the surge in RLUSD trading volume at DigitalX was due to the private VIP event. The main content of this event was to provide additional RLUSD based on the trading volume of RLUSD for VIP customers. These are so-called 'big investors' who engaged in RLUSD trading to receive rewards, leading to the sudden increase in trading volume.

DigitalX benefited from this event, enjoying the effects of a significant increase in overall market share. The trading market share of DigitalX in the KRW market reached 8.96% on August 24, a 16-fold increase from 0.57% on the previous weekday, August 21. By the 28th, the trading volume of RLUSD fluctuated between approximately 150 billion to 300 billion KRW, with market shares ranging from 5% to 10%.

However, as RLUSD trading decreased afterward, so did the market share. The trading volume of RLUSD plummeted to 1.6 million KRW from the 29th, and the market share fell to 0-1%, returning DigitalX's overall trading market share to levels prior to the surge in RLUSD trading.

Repetition of Past Strategies

In the past, despite fierce competition from other exchanges, DigitalX maintained a conservative listing policy for a long time, leading to its reputation as a model exchange that complied well with regulations. However, it seems that due to the market downturn that has persisted since October 2025, DigitalX has opted for a strategy of increasing trading volume through trading rewards. There was already a case where Bithumb briefly surpassed Upbit's market share by introducing a similar strategy at the end of 2023, which received criticism and controversy over wash trading, yet was deemed effective for securing market share.

Previously, DigitalX had also employed the same strategy before RLUSD. In February, DigitalX conducted a trading event for USDC (USD Coin), providing rewards based on trading. Through this event, DigitalX's market share soared to over 11%. At that time, 95% of DigitalX's total trading volume was from USDC trading.

The commonality between USDC and RLUSD is that they are both stablecoins. Stablecoins are pegged to fiat currencies, resulting in lower price volatility compared to other digital assets. For users participating in trading events, the risk of loss is lower, making it less burdensome, while exchanges can fill their order books and trading volumes, achieving the intended effects.

Criticism of "Illusory Trading"

However, there are ongoing criticisms that such events encourage illegal activities by exchanges. Hong Pureun, the representative lawyer of Descent Law Firm, criticized, "Eliminating trading fees and ranking the trading volumes of individual digital assets to distribute products results in users colluding to repeatedly trade at the same price, encouraging illegal activities."

He further pointed out, "There could be collusive trading, which is prohibited by the Virtual Asset User Protection Act, and if false trading increases, leading to a high total trading volume, it could be considered an act that misleads people into believing that 'trading is thriving.'" He added, "Since the event could lead participants to criminal penalties, exchanges should issue 'warnings' to alert users."

The Virtual Asset User Protection Act only regulates unfair trading practices and does not address market distortions. Instead, self-regulation is conducted through the Digital Asset Exchange Joint Council (DAXA), but it has no legal binding force.

Representative Cho Jung-hoon stated, "If benefits are only given to VIPs while hiding them from general investors and only showing trading volumes to the market, it is difficult to consider it a fair market." He pointed out that DigitalX, which has confirmed the existence of private VIP events, has not disclosed specific details in response to the National Assembly's request for information, citing trade secrets, which is hard to understand.

He continued, "Market transparency cannot be obscured under the guise of trade secrets," emphasizing that financial authorities should not only monitor trading volumes but also verify the hidden incentives that created those volumes.

In response, the Financial Supervisory Service explained to Representative Cho Jung-hoon’s office, "Regarding event operations, we are implementing 'Best Practices for Advertising and Promotion Activities of Virtual Asset Businesses' in collaboration with the industry to prevent user harm due to excessive competition and to enhance the soundness and transparency of events."

They also added, "Due to the limitations of self-regulation, we are in discussions with the Financial Services Commission to establish regulations against unhealthy business practices such as excessive competition in the second stage of legislation." It is now a crucial time for clear regulations and guidelines to address ambiguous loopholes and circumventions.

This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.