South Korea’s Monetary Providers Fee (FSC) is about to research Upbit, the nation’s largest crypto buying and selling platform, amid issues about its dominant place available in the market, as reported by native media outlet einfomax on Oct. 10.
FSC Chairman Kim Byung-hwan confirmed the probe, noting that the company will look at the digital asset market’s reliance on Upbit.
The transfer follows issues raised by lawmaker Lee Kang-il about Upbit’s relationship with Okay Financial institution, South Korea’s first internet-only financial institution.
Okay Financial institution, launched in 2017, is reportedly making ready for an Preliminary Public Providing (IPO) to lift 984 billion received (round $731.64 million). If profitable, it might be among the many largest IPOs in 2024. In the meantime, Upbit stays South Korea’s largest crypto change by buying and selling quantity and considerably influences the broader Asian market.
Considerations over Upbit’s dominance in Okay Financial institution’s deposits
Lee Kang-il revealed that Upbit deposits account for 4 trillion received of Okay Financial institution’s 22 trillion received in complete deposits, making up almost 20%. He warned {that a} disruption in Upbit’s operations may set off a financial institution run on Okay Financial institution.
Lee additionally criticized Okay Financial institution for providing excessive rates of interest—2.1%—on Upbit buyer deposits, calling the speed unsustainable given the financial institution’s low-profit margins. He additional argued that the shut relationship between Upbit and Okay Financial institution contradicts the precept of separating finance and trade.
In response, the FSC’s chief said that Okay Financial institution’s itemizing course of would bear a complete evaluation. The Digital Asset Committee, a physique overseeing digital property in South Korea, may even look at the matter.
Upbit and Okay Financial institution’s collaboration
This investigation comes lower than a month after Dunamu, Upbit’s mum or dad firm, Okay Financial institution, and BC Card signed a memorandum of understanding (MOU) to ascertain a cooperative digital monetary providers mannequin.
The settlement will leverage Dunamu’s digital asset buying and selling platform, Okay Financial institution’s cellular banking infrastructure, and BC Card’s cost processing methods.
The collaboration goals to drive the expansion of South Korea’s digital monetary ecosystem by combining the strengths of every firm’s expertise and providers.