Upbit, a cryptocurrency exchange located in Seoul’s affluent Gangnam area, has risen to rank among the top five exchanges worldwide by trading volume. The crypto market’s recent bull run has brought significant gains to South Korea, fueling speculation that the Korean won could soon replace the US dollar as the preferred currency for trading Bitcoin and other digital assets.
Upbit Dominates the Korean Market Volume
Based on Bloomberg’s latest findings, approximately 80% of all cryptocurrency trades in South Korea are being conducted on Upbit. This is an impressive achievement for Upbit as no other exchange has managed to hold such a significant market share in this prominent crypto market. Furthermore, Upbit is currently locking horns with Coinbase Global Inc (NASDAQ: COIN), a major player in the US crypto exchange scene.
Last year, approximately one-fifth of the deposits made by Upbit’s customers came from its significant banking partners. This development prompted strong criticism from a South Korean legislator. Nevertheless, new legislation has since been implemented in response to the collapse of TerraUSD, a stablecoin created by Do Kwon, a South Korean entrepreneur, in 2022.
Nam HyeonJoon, a spokesperson for Bithumb, Korea’s second-largest trading platform stated:
In the new regulatory framework, crypto exchanges are expected to increase their reserve funds, obtain insurance policies for investor protection, and intensify surveillance of questionable transactions. This will call for significant financial resources and personnel.
Upbit, which was introduced in 2017, is managed by the fintech company Dunamu Inc. As per CCData’s latest report, this exchange currently handles around 5% of global crypto trading transactions – a significant increase from the 1.4% recorded in January 2021.
In 2021, Upbit became the first cryptocurrency exchange to register with South Korea’s Financial Intelligence Unit. This achievement came about due to their collaboration with K-Bank, an online banking institution. It is important to note that prior to registering with Korean regulatory bodies, exchanges must secure partnerships with banks.
Last year, a news article reported that approximately 18% of all deposits in K-Bank were held by Upbit. This finding, made public last October, sparked controversy among South Korean lawmaker Kim Heegon, who referred to the bank as “Upbit’s personal safety deposit box.”
During an interview, a representative from K-Bank explained that funds deposited in Upbit, their exchange platform, are not used for lending activities and can be withdrawn instantly. Moreover, he mentioned that the income from Upbit represents a minimal fraction of K-Bank’s overall profits.
South Korea to Implement Strict Regulations
Starting in May, regulatory bodies in South Korea plan to implement more stringent regulations for the listing of tokens on centralized cryptocurrency exchanges (CEXs). These guidelines will apply to both local and international exchanges once enacted. This action is an initiative by South Korea to improve transparency and security within its crypto market.
According to a previous report by Coinspeaker, regulators now have the power to require cryptocurrency exchanges to delete certain digital assets from their platforms if they don’t provide full disclosure about these assets.
Read More
Sorry. No data so far.
2024-04-25 13:09