30-somethings led crypto purchases at South Korean exchanges in 2021

August 30, 2021 Coin Telegraph

Bithumb

The increased trading volume comes following the country's Financial Services Commission requiring crypto trading platforms to register as digital asset service providers before Sept. 24.

Crypto users between 30-39 years old in South Korea are reportedly the demographic with the most deposits on major exchanges in the country.

According to a Sunday report from the Yonhap News Agency, South Korean residents in their 30s deposited roughly 2.2 trillion KRW — $1.9 billion at the time of publication — to crypto exchanges Upbit, Bithumb, Coinone, and Korbit by the end of the second quarter of 2021. Teenagers in the country represented the group with the fewest deposits at $3.4 million, but this still was a more than 400% increase compared to the $824,000 those under 20 years old deposited in Q1 2021.

“All age groups are investing in virtual assets," said Doo-Hyun Yoon, a member of the National Assembly's Political Affairs Committee. "The government needs to be more careful in setting up policy on virtual assets, including paying special attention to the position of young investors."

Upbit users accounted for the majority of the deposits with 3.5 billion KRW, followed by Bithumb and Coinone. This month, Upbit reportedly became one of the first South Korean crypto exchanges to register with the country’s regulators — the Financial Services Commission announced earlier this year local crypto trading platforms would be required to register as digital asset service providers before Sept. 24.

As major crypto exchanges work to meet this deadline, smaller ones have reportedly been considering suing the South Korean government over its alleged failure to to take responsibility for excessive regulatory pressure. The new regulations allow authorities to impose a fine of up to 50 million KRW on exchanges not in compliance or have their operators face up to five years in prison.

Upbit reportedly first crypto exchange to file with Korean regulators

August 23, 2021 Coin Telegraph

Coin Telegraph

Upbit is one of South Korea’s largest cryptocurrency exchanges alongside Bithumb, Coinone and Korbit — who are collectively referred to as “The Big Four.”

Major South Korean cryptocurrency company Upbit has reportedly submitted a business report with the Korean Financial Intelligence Unit (FIU).

Upbit reported its digital asset business to the FIU, which operates under South Korea’s top financial regulator, the Financial Services Commission (FSC). Upbit’s operator, Dunamu, announced the news on Friday, The Korea Economic Daily reported.

Upbit is one of South Korea’s largest cryptocurrency exchanges alongside Bithumb, Coinone and Korbit, and reportedly makes up more than 80% of the local cryptocurrency market. FSC vice chairman Doh Gyu-sang said that the authority will be ready to accept more reports from the most popular South Korean exchanges in the near future. The official said that the FSC expects one or two more crypto exchanges to have filed reports by the end of August.

The FSC did not immediately respond to Cointelegraph’s request for comment.

South Korean authorities have required all local crypto trading platforms to register their businesses as digital asset service providers before Sept. 24 or face an outright ban on operations in the country. In order to register with the FIU, exchanges need to establish a banking partner and report real-name bank accounts for all their clients. As previously reported, Upbit has set up real-name account verification with local internet bank K Bank.

As South Korean financial authorities continue focusing on bigger crypto exchanges in terms of registration, smaller crypto trading platforms are apparently struggling to comply with local requirements. A number of smaller South Korean crypto exchanges such as Bitsonic and CPDAX announced temporary suspensions or entire service termination over the past few months.

An FSC representative told Cointelegraph in early August that the authority was not looking to close down smaller exchanges but rather was looking to freeze the use of fraudulent collective accounts, or borrowed-name accounts, on the platforms.

Korean Exchanges Delist High-risk Coins as They Face Tough Regulations

June 17, 2021 Bitcoin.com

Regulations drive Korean exchanges to delist, warn against high risk coins

June 16, 2021 Coin Telegraph

Coin Telegraph

Amid increasing scrutiny and demand from regulators, South Korean crypto exchanges are sifting through their supported assets and delisting or placing high-risk coins on an investor warning list.

South Korea's cryptocurrency market continues to transform under the weight of mounting regulatory pressures. Major crypto exchanges such as Upbit have this week moved to delist or warn against specific digital assets they have judged to be high-risk for investors.

The trend, as local reporters note, has seemingly been sparked by the increasing level of intervention by financial regulators into crypto service providers' operations. Last week, Korea's Financial Intelligence Unit (FIU) reportedly contacted 33 crypto trading platforms to warn that it would be conducting a field consultation before Sept. 24.

These consultations aim to check whether or not the businesses are compliant with requirements set by the Specific Financial Transactions Act, which came into force in March of this year.

Ubit delisted Maro, Paycoin, Observer, Solve.Care and Quiztok last week and issued warnings on its English site for six assets on June 11, triggering a one-week review process by the end of which a final decision as to whether or not to delist these six will be taken. As the Korean Herald notes, the initial delistings sparked a plummet in the coins' prices, with typical losses of 50–70% in value. Beyond the investment warnings published in English, Upbit's new investment warnings reportedly extend to 25 different assets, or roughly 14% of the coins listed on the platform.

In addition to Upbit, a reported total of 11 out of 20 exchanges that received a Security Management System certificate have taken similar moves and Korea's Financial Supervisory Service has also this week contacted multiple exchanges requesting that they provide the agency with the details of delisted or suspended assets.

In addition to agencies' direct communications with exchanges, Korea's Financial Services Commission (FSC), which is tasked with oversight of the cryptocurrency market, has formed reportedly five new working groups that will be each charged with specific tasks tied to implementing Korea's new crypto regulatory regime, ranging from advising exchanges seeking registration or working with the National Assembly to enact measures aimed at improving the country's cryptocurrency ecosystem.

The groups' assigned roles are indicated in their nomenclature: Daily Situation Group, Reporting and Response Group, On-the-spot Consulting Group, Capital Market Group and System Improvement Group. Under the auspices of the FIU, the groups will work together with Financial Supervisory Service’s Anti-Money Laundering office, Korea Exchange Securities Market Headquarters, Korea Securities Depository, Korea Federation of Banks and Koscom.

Earlier this week, Cointelegraph reported that a new policy from the FSC will require that that banks classify any crypto exchange clients as “high risk.” The agency has also clarified its roadmap for ensuring that crypto exchanges seeking authorization implement strong transaction monitoring and uphold strong user ID requirements. Following the Sept. 24 final deadline, financial intelligence officials will be charged with scrutinizing applicant crypto exchanges’ trading activities for a review period of three months.

South Korea’s Financial Regulator Holds Closed-Door Meeting With 20 Crypto Exchanges

June 5, 2021 Bitcoin.com

South Korea’s banking association alarmed by altcoin trading mania

May 10, 2021 Coin Telegraph

alt season

South Korea’s banking body wants crypto exchanges to be wary of the risks of being overexposed to altcoins.

The Korea Federation of Banks has raised alarm over the increase in altcoin trading volumes across crypto exchanges in the country.

According to a report by The Korea Herald on Monday, the banking association has asked member banks to conduct an audit on the altcoins being offered by their crypto exchange clients.

The KFB is reportedly concerned about the potential risks of banks providing account services to exchanges overexposed to altcoins.

An official of the banking association quoted by The Korea Herald explained:

“One of the criteria that we recommend is the safety of digital assets and that can be measured by the number of digital coins on an exchange. If an exchange deals with too many digital assets, it takes on more risks.”

As previously reported by Cointelegraph, there has been a noticeable pivot by crypto traders in South Korea toward altcoins. This shift coincided with a corresponding dip in Bitcoin (BTC) trading activity that had characterized the earlier part of the year, even leading to the collapse of the Kimchi premium.

Three of South Korea’s “Big Four” crypto exchanges — Upbit, Coinone and Bithumb — each list over 150 altcoins on their platforms. The KFB’s recommendation comes as BTC trading on these exchanges accounted for less than 5%, far lower than the average across other major exchanges like Coinbase and Binance.

Indeed, as of the time of writing, only Coinone has Bitcoin trading activity occupying the top two positions in the last 24-hour period. Data from CoinMarketCap shows BTC trading on Upbit and Bithumb at 4.15% and 9.13%, respectively.

Under South Korea’s real-name crypto trading paradigm, the onus is on banks to maintain strict oversight over their cryptocurrency exchange clients, hence the reason for the KFB’s warning. The banking association also wants its members to be aware of the potential money laundering risks that could be associated with the current altcoin trading explosion.

South Korea’s altcoin trading surge is yet another piece of evidence in support of the alt season market cycle narrative. Indeed, Bitcoin's market capitalization dominance continues to decline and is now at its lowest level since July 2018.

Several major altcoins have set new all-time highs, with Ether (ETH) breaking the $4,000 milestone to deliver over 450% in year-to-date gains.

Upbit investor stock price surges three-fold amid bullish crypto trading in South Korea

April 7, 2021 Coin Telegraph

Coin Telegraph

A minority investor in a major South Korean crypto exchange is currently the best performing stock in the country.

The effects of South Korea’s crypto frenzy seem to be spreading beyond the cryptocurrency market to affect stock prices in the country’s stock exchange.

According to a report by Bloomberg on Wednesday, Hanwha Investment & Securities Co. has seen its stock price almost triple since the start of the year.

Indeed, at the time of writing, Hanwha Investment is trading at 6,550 Korean won per share, which constitutes a 197% stock price gain year-to-date.

This almost-200% share price increase puts Hanwha Investment as the best performing of the companies in the Korea Composite Stock Price Index.

Hanwha Investment’s bullish share price growth is likely tied to the company’s crypto association. The financial investment service provider holds a minority stake in Dunamu — operators of the Upbit cryptocurrency exchange.

Upbit, along with Korbit, Bithumb and Coinone are collectively known as the “big four” crypto exchanges in South Korea, controlling a major share of the country’s cryptocurrency trading activity.

The crypto causality case for Hanwha Investment’s share price increase is also further strengthened by the performance of other Dunamu backers. Both Woori Tech and Kakao Corp have also posted significant stock price gains in recent times.

As previously reported by Cointelegraph, South Korean brokerage firm Mirae Asset Daewoo is tipping Kakao stock to increase significantly in 2021 on the back of crypto enthusiasm in the country.

Meanwhile, Dunamu is reportedly mulling a public listing in the United States, which could happen on the Nasdaq. Dunamu’s announcement coincided with Coinbase moving forward with its direct listing on Nasdaq, which triggered renewed enthusiasm for crypto stocks in South Korea.

Upbit’s upsurge in crypto trading activity has also seen its main banker K Bank recover from a tumultuous 2020 while announcing plans for a possible initial public offering in 2022. Massive crypto user onboarding by K Bank for trading on Upbit has seen the bank shake off the $89 million posted in 2019.

Upbit

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