30s Summary

South Korean crypto exchange, Upbit, is being investigated by the country’s Financial Services Commission (FSC) over concerns it may hold too much market control. Upbit’s relationship with online bank K-Bank is also under examination as Upbit’s funds make up a significant portion of K-Bank’s deposits. This could potentially pose a risk to the bank. The FSC’s chairman, Kim Byung-hwan, reassured he would address these concerns and scrutinize Upbit’s structure. It has been suggested that Upbit controls over 80% of the domestic market. Meanwhile, K-Bank is preparing for a public listing in Seoul in September.

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Upbit, a top cryptocurrency exchange based in South Korea, is facing scrutiny from local financial watchdogs over potentially controlling too much of the market. South Korea’s Financial Services Commission (FSC) is planning to delve deeper into this issue, according to the local news outlet Infomax.

Established just back in 2017, Upbit is already one of South Korea’s biggest crypto exchanges, and it shows on the world stage too, pulling in around $1.2 billion in trades daily says CoinGecko.

The investigation seems to be tied to concerns about Upbit’s dealings with online bank K-Bank. During a review by South Korea’s National Assembly, lawmaker Lee Kang-il voiced his worries of Upbit controlling the market and how it may affect K-Bank. This emerged as Upbit’s funds constitute a chunk of K-Bank’s deposits which could potentially expose the bank to a bank-run risk.

Chairman Kim Byung-hwan of the FSC has acknowledged the worries and promised to look into the structure of Upbit in response to these concerns. He was also quick to mention that they had put into action the Electronic Financial Transaction Act recently and would check out the situation after the system has been set up.

Interestingly, K-Bank, Upbit’s long-time banking partner, revealed plans to go public in Seoul this September which could rake in around $732 million. If this goes as planned, it could be the largest public listing in South Korea in nearly three years. Notably, the bank’s close connection with crypto exchanges has been a point of discussion for some time. Various reports suggest that as much as 70% of K-Bank’s deposits are tied to crypto. Concerns over Upbit’s connection with K-Bank have also appeared several times in South Korean media with many reports indicating that Upbit commands over 80% of the market share in South Korea.

On Oct. 14, Upbit Global is planning to pause crypto withdrawals and deposits due to scheduled server maintenance. However, as of yet, there’s been no public response from Upbit about the alleged monopoly investigation.

Source: Cointelegraph