Upbit, based in South Korea, accounts for over 80% of the country’s cryptocurrency trading activity and is among the top five exchanges globally in terms of trading volume. According to a Bloomberg report, Upit’s customers made up almost 20% of deposits from its major banking partners last year.
Upbit, headquartered in South Korea, dominates the local cryptocurrency market with approximately 80% of the trading transactions. Globally, it ranks among the top five exchanges based on daily trading volume.
Based on Bloomberg’s findings, Upbit’s clients accounted for approximately one-fifth of the total deposits made by Upbit’s significant banking partners in the previous year.
Upbit’s Dominance Sparks Concerns
The significant influence of Upbit has sparked criticisms and apprehensions, especially with South Korea’s plans to introduce investor protection laws post-TerraUSD stablecoin crash in 2022.
The new regulations, effective from July under the Virtual Asset User Protection Act, will introduce stringent measures for crypto exchanges. These measures include bolstering reserve funds, strengthening investor safeguards, and heightening surveillance of questionable transactions.
As a market analyst, I can express this as follows: My analysis indicates that the apprehensions arise from the potential strengthening of Upbit’s dominance within the Korean market due to these regulations.
As a crypto investor, I’ve closely followed the updates from Bithumb, Korea’s second-largest cryptocurrency exchange. Recently, their spokesperson, Nam HyeonJoon, spoke about the new regulatory framework and the hurdles it poses. He emphasized the substantial financial resources and human effort needed for compliance.
Simon Seojoon Kim, the CEO of Hashed, a South Korean venture capital company, shared similar views. He pointed out that established exchanges such as Upbit might have an edge in complying with the latest regulations due to their extensive resources. This could potentially create a larger divide between leading market players and smaller competitors.
International businesses aiming to enter the Korean market through cryptocurrency exchanges have encountered regulatory hurdles. For instance, Crypto.com, based in Singapore, has postponed its intended debut in South Korea due to the requirement for more dialogue with regulatory authorities.
After receiving reports of regulatory investigation and allegations regarding potential lapses in anti-money laundering procedures, the decision was made.
As an analyst at Korbit Research, I’ve been closely monitoring the crypto market since the new regulations were passed in June. Smaller exchanges such as Huobi Korea, Cashierest, and Coinbit have unfortunately had to shut down as a result. However, I believe Upbit will have an easier time adapting to these changes. The competition within the exchange sector is becoming more intense, with the focus shifting towards the top players in the market.
South Korea’s Crypto Craze
As an analyst, I’ve observed that South Korea’s enthusiasm for cryptocurrencies remains undeterred by regulatory challenges. Approximately 10% of the population, equating to over six million people, are actively involved in cryptocurrency trading. Furthermore, the South Korean won is increasingly being used as a counter currency in global crypto transactions.
The nation continues to be a bustling hub for cryptocurrency advocates. As expressed by Ho Chan Chung, the head of marketing at Korean analytics company CryptoQuant, “I used to put more money into stocks, but now I’ve fully committed to crypto.”
As a researcher studying the crypto market, I’ve observed that Upbit, which was introduced by Dunamu Inc. in 2017, has rapidly gained significance. According to CCData, its global trading volume has experienced a remarkable increase, reaching almost 5% as of now, compared to the 1.4% recorded in January 2021. With notable backers like Kakao Corp. and Woori Technology Investment, Upbit attained a peak valuation of an impressive $15.7 billion during the pandemic period.
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2024-04-28 07:22