Financial Services Commission Chairman Kim Byung-hwan said he would “look into the matter” regarding market dominance by Upbit, the country’s leading crypto exchange.
At a National Assembly meeting, lawmaker Lee Kang-il raised questions about Upbit’s dominance and close partnership with local bank, K-Bank.
The online banking company holds a significant portion of Upbit’s deposits, according to an October 10 report in local media.
Monopoly problems
“I am aware of the problem with Upbit’s monopolistic system,” Lee said, adding:
“The monopolistic trend towards one company, Upbit, began after its business partnership with K-Bank.”
He then raised the issue of Upbit hogging a significant portion of the deposits of K Bank, which is expected to undergo an initial public offering (IPO) soon.
The lawmaker said Upbit accounts for about 20 percent of K-Bank’s 22 trillion KRW (about $16.3 billion) in deposits, adding: “If Upbit transactions are disrupted, a bank run on K-Bank -Bank will occur. » He also criticized the bank, questioning whether it was reasonable for such an organization with a profit margin of less than 1% to offer 2.1% for Upbit customer deposits.
“The influence between Upbit and K-Bank violates the principle of separation of finance and industry,” he added.
FSC Chairman Kim responded by stating that “the review of K-Bank’s IPO has been thoroughly reviewed,” adding, “Since we have a virtual assets committee, we will review the situation (Upbit) globally. »
This week, South Korea’s Ministry of Strategy and Finance announced that it was reviewing measures to more strictly regulate stablecoins.
Huge Upbit in South Korea
According to CoinGecko, the centralized exchange Upbit, established in 2017, has a daily trading volume of $1.2 billion. Around 10% of this volume is made up of the BTC/KRW pair, with altcoins such as Chilliz (CHZ) and Sui (SUI) also popular among Korean crypto traders.
Trading volume on the stock exchange reached $15 billion during the 2024 market peak in mid-March. In comparison, the world’s leading exchange, Binance, has a daily currency volume of around $12.5 billion.
Earlier this year, CryptoPotato reported that Upbit dominated 80% of crypto trading in South Korea and ranked fifth in the world. Bithumb is Korea’s second-largest crypto exchange, with a daily volume of $700 million.
In late September, Upbit announced a change to its privacy policy to store user data on Amazon Web Services (AWS) US servers, effective October 1.
Binance Free $600 (CryptoPotato Exclusive): Use this link to create a new account and receive an exclusive $600 welcome offer on Binance (all details).
LIMITED OFFER 2024 on BYDFi Exchange: Up to $2,888 Welcome Reward, use this link to sign up and open a 100 USDT-M position for free!
