Upbit, South Korea’s major crypto exchange, dominates 80% of the country’s crypto trading. It’s now among the top five global exchanges, challenging giants like Coinbase. Asian crypto markets, especially in South Korea, are booming again.
Recent reports show that the Korean Won is now the most-used currency for trading BTC and other cryptocurrencies, surpassing the US Dollar.
Upbit Dominates South Korea’s Crypto Landscape
Wide Selection and Dominant Market Share: Upbit stands out in South Korea’s crypto scene by offering a diverse range of cryptocurrencies, easily accessible to users. Its dominance is evident as it commands a staggering 80% share of the country’s total crypto trading volumes, placing it in direct competition with global giants like Coinbase.
Impact on Competitors and Regulatory Scrutiny: While Upbit thrives, other major players like Binance appear to be losing ground in Asia. However, Upbit’s rise occurs amidst heightened regulatory scrutiny in South Korea. Last year, Upbit faced criticism when nearly a fifth of its banking partner’s deposits were from Upbit’s clientele.
Regulatory Changes and Upbit’s Response: New legislation aimed at protecting investors, particularly after the collapse of TerraUSD in 2022, poses both challenges and opportunities for Upbit. The updated framework mandates exchanges to strengthen reserves, secure investor protection insurance, and enhance surveillance of suspicious transactions. In response, Upbit announced stricter measures, such as imposing limits on deposits and withdrawals exceeding $1 million.
Impact on Expansion Plans: In light of evolving regulatory requirements, some international players, like Crypto.com, have had to adjust their plans. Crypto.com recently postponed its launch in South Korea, citing the need for further consultations with regulators.
South Korean Traders’ Continued Interest in Crypto Amidst Challenges
Despite the significant blow-up of the TerraUSD stablecoin amounting to $40 billion, South Korean traders have remained actively involved in the crypto space, indicating their appetite for high-risk, high-reward investments.
Official data reveals that over 6 million Koreans, constituting over 10% of the population, participated in cryptocurrency trading on registered exchanges in the first half of last year. This widespread interest in crypto has become a political concern in Seoul, with competing candidates in recent parliamentary elections pledging measures to postpone taxes on digital assets or ease constraints on investing in US Bitcoin ETFs.
Altcoins, referring to smaller tokens beyond Bitcoin and Ethereum, dominate 80% of the trading volume on Korean exchanges, contrasting sharply with global platforms where they represent around 50%, as highlighted by data from CryptoQuant. Ho Chan Chung, head of marketing at Korean analytics firm CryptoQuant, remarked on this trend, stating, “I invested more in stocks before, but now I’m all in crypto. The Korean stock market has stagnated, and companies don’t operate for shareholders’ benefit.”
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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