The South Korean Financial Services Commission (FSC) is set to probe Upbit , a prominent cryptocurrency exchange, for alleged anti-monopoly crimes. The investigation began when legislators expressed worries about Upbit's market dominance and ties with online bank K-Bank.
During a parliamentary audit, MP Lee Kang-il emphasized Upbit's considerable market share and K-Bank deposits' impact. Upbit controls more than half of the South Korean cryptocurrency market, with a 24-hour trading volume topping $1.18B.
FSC Chairman Kim Byung-hwan recognized the monopolistic issue and offered to look into Upbit's market structure. The regulator intends to analyze the situation following the recent adoption of the Electronic Financial Transactions Act.
The link between Upbit and K-Bank has come under examination. Upbit deposits account for around 20% of K-Bank's total deposits, prompting worries about possible bank run risks. Critics contend that this structure breaches the notion of separating the financial and industrial sectors.
Upbit's domination goes beyond South Korea, as it is one of the largest exchanges worldwide. Some investors have referred to the site as a "wild west" of crypto trading , noting tactics like pump-and-dump scams and wash trading.
The inquiry might have larger repercussions for South Korea's crypto industry. Experts are concerned that more scrutiny would lead to a decrease in crypto prices.
As regulators look deeper into Upbit's practices, the crypto market braces for potential consequences. The findings of this inquiry may influence the future landscape of South Korea's digital asset business.
