Major South Korean cryptocurrency exchange Upbit reportedly faces a monopoly investigation from local financial regulators.
South Korea’s Financial Services Commission (FSC) plans to investigate Upbit exchange for potential anti-monopoly breaches, the local news agency Infomax reported on Oct. 9.
Founded in 2017, Upbit is one of the largest crypto exchanges in South Korea and globally, with roughly $1.2 billion in daily trades, according to CoinGecko.
Investigation tied to Upbit’s relationship with K-Bank
During an audit by the South Korean parliament, the National Assembly, lawmaker Lee Kang-il reportedly expressed concerns about Upbit’s market monopoly and its relationship with online bank K-Bank.
He raised the issue of Upbit’s funds accounting for a significant portion of K-Bank’s deposits, posing a potential bank-run risk.
FSC Chairman Kim Byung-hwan said that he was aware of Upbit’s potential monopoly issue and that the FSC would investigate Upbit’s structure in response to Lee’s concerns.
FSC chairman Kim Byung-hwan at the the authority’s state audit. Source: News1
“We implemented the Electronic Financial Transaction Act on Sept. 15, and we will check the situation after the system is implemented,” Kim said.
Up to 70% of K-Bank’s deposits were reported to be tied to crypto in late 2023
K-Bank, which has been a major banker of Upbit since at least 2021, filed for an initial public offering in Seoul in September. The offering could raise as much as $732 million, making it the biggest South Korean public listing in almost three years.
The bank’s ties with cryptocurrency exchanges must have been an issue for a while, as local reports in November 2023 indicated that as much as 70% of K-Bank’s deposits were linked to crypto.
Concerns over Upbit’s connection with K-Bank have also repeatedly surfaced in South Korean media, with some reports suggesting that Upbit’s market share in the country is more than 80%.
Despite the latest reports on the alleged investigation into Upbit, the crypto exchange has not publicly addressed the issue as of this writing.
Source: Upbit Global
On Oct. 10, Upbit Global notified its users on X that the trading platform would perform scheduled server maintenance on Oct. 14, temporarily suspending crypto withdrawals and deposits.
Magazine: Insane Satoshi podcast created in seconds, Crypto + AI outperform memecoins: AI Eye