Financial Services Commission Chairman Kim Byung-hwan indicated he would “look into” the market dominance of South Korea’s leading crypto exchange, Upbit. During a national assembly meeting, legislator Lee Kang-il highlighted concerns about Upbit’s influence and its close partnership with local bank K-Bank. According to a report in local media, K-Bank maintains a significant amount of Upbit’s deposits.
**Monopoly Concerns**
“I am aware of the issue of Upbit’s monopolistic system,” Lee stated, noting that this trend emerged following its business alliance with K-Bank. He pointed out that Upbit represents a substantial portion of K-Bank’s deposits, which is preparing for an initial public offering (IPO), suggesting that severing Upbit transactions could trigger a bank run on K-Bank. Lee also scrutinized the bank’s decision to offer 2.1% interest for Upbit customer deposits despite having a profit margin of less than 1%. He commented, “The influence between Upbit and K-Bank violates the principle of separating finance from industry.”
FSC Chairman Kim assured that the IPO review of K-Bank has been diligently conducted, adding that their virtual asset committee will thoroughly examine the Upbit situation. This week, South Korea’s Ministry of Strategy and Finance revealed plans to tighten regulations on stablecoins.
**Upbit’s Prominence in South Korea**
Based on CoinGecko data, Upbit, a centralized exchange founded in 2017, has a daily trading volume of $1.2 billion, with the BTC/KRW pair comprising 10% of this volume. Altcoins such as Chilliz (CHZ) and Sui (SUI) are also quite popular among Korean traders. The exchange’s trading volume surged to $15 billion during the market peak in March 2024. Comparatively, the leading global exchange, Binance, reports a daily volume of approximately $12.5 billion. Earlier in the year, it was reported that Upbit controlled 80% of South Korea’s crypto trading and ranked fifth globally. Bithumb, the second-largest crypto exchange in Korea, handles $700 million in daily volume. In late September, Upbit announced a change in its privacy policy to store user data on US Amazon Web Services (AWS) servers, effective from October 1.
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