The South Korean Financial Services Commission (FSC) has announced that it will investigate the monopolistic structure of the crypto asset market, which is primarily concentrated around the cryptocurrency exchange Upbit.
FSC Chairman to Investigate Upbit's Market Dominance
The Chairman of the Financial Services Commission, Kim Byung-hwan, stated that they will closely examine the situation where Upbit dominates the cryptocurrency market in South Korea. During a national assembly meeting, lawmaker Lee Kang-il raised concerns about Upbit's dominance and its close partnership with the bank K-Bank.
Monopoly Concerns
According to reports from October 10, K-Bank, a local online bank, is one of Upbit's main partners and holds a significant portion of its deposits. Lee noted that Upbit’s monopolistic trend began due to its partnership with K-Bank. He also raised concerns about Upbit managing approximately 20% of K-Bank’s 22 trillion KRW (around 16.3 billion USD) in deposits, warning that any issues with Upbit could lead to serious consequences for K-Bank, which is preparing for an initial public offering (IPO).
Lee criticized the bank for offering a 2.1% interest rate on Upbit customers' deposits, while its own profit margin is below 1%. He argued that the influence between Upbit and K-Bank violates the principle of separating finance and industry.
FSC to Review Upbit and K-Bank's IPO
FSC Chairman Kim responded by stating that the IPO of K-Bank is being thoroughly reviewed and added that, given the existence of a virtual asset committee, Upbit’s situation will be comprehensively evaluated.
Stricter Regulation of Stablecoins
This week, the South Korean Ministry of Strategy and Finance announced that it is reviewing measures to tighten the regulation of stablecoins, which may impact other cryptocurrency projects in the country.
Upbit's Market Dominance
The cryptocurrency exchange Upbit, founded in 2017, has a daily trading volume of around 1.2 billion USD, according to CoinGecko. Approximately 10% of this volume consists of trading in the BTC/KRW pair, with altcoins such as Chilliz (CHZ) and Sui (SUI) also popular among Korean traders.
In March 2024, Upbit's daily trading volume surged to 15 billion USD, comparable to Binance, which recorded around 12.5 billion USD in volume at the time.
Upbit controls 80% of South Korea's cryptocurrency trading and is the fifth-largest exchange globally. The second-largest exchange in Korea, Bithumb, has a daily volume of 700 million USD.
Changes in Privacy Policy
At the end of September, Upbit announced changes to its privacy policy, stating that as of October 1, user data would be stored on U.S. servers provided by Amazon Web Services (AWS).
#Upbit , #bitcoin☀️ , #SouthKorea , #cryptoregulation , #Stablecoins

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