South Korean medium-sized crypto exchanges are vying for the “big four trading platforms’ vice-like grip over the industry, but crucial banking breakthroughs remain elusive.
The Financial Intelligence Unit (FIU), granted permits to over a dozen cryptocurrency exchanges last week, EDaily reported. This brings the total number of registered crypto operators in the country (e.g. wallets, exchanges) to 29. This includes five wallet operators as well as the “big four” cryptocurrency trading platforms: Upbit , Bithumb , Korbit,, Coinone. These four companies have been granted banking partnerships which allow them to offer fiat on/off ramps.
The 20 remaining firms are exchanges that failed obtain real-name-authenticated banking transactions prior to the September 24 registration deadline. caused a number of exchanges to close in the days thatollowing.
These 20 exchanges are now stuck in a vanishingly small crypto-to-crypto-only market, frozen out of their once-lucrative KRW pairings – and are legally prohibited from offering fiat KRW markets.
This has led to firms being forced into crypto-to-crypto purgatory. They are required to offer customers Bitcoin (BTC) pairs that allow them access to fiat markets through the won-trading four.
They include Flybit. It received its permit about a month ago. at that time pledged it would develop “leading socially-responsible business initiatives” as well as “build customer loyalty”.
Since then, the firm has hired senior officers from major banking franchises such as NongHyup, Kookmin and Daily Hankook .
It also adopted per Daily, a Financial Action Task Force -compliant data portal, months before the promulgation legislation that will make platforms do so.
A spokesperson for the exchange said Cryptonews.com.
Flybit will comply with the obligations imposed on virtual asset operators (VASPs by the financial authorities. We also plan to reopen our Won Market Service as soon as possible, securing a real-name-authenticated bank account [contract].
Others of similar size are also trying to escape crypto-to-crypto purgatory. Some seem to be optimistic. The Korea Real Estate Investment & Trust purchased an 8% stake Huobi Korea in an unprecedented transaction, according to The Bell Korea . According to reports, the exchange is confident it will find a bank partner within the next year.
Hanbitco has reported that the same media outlet had report separately that they have “recently begun talking with several banks about partnership opportunities.” The deadline was September 24th, and the firm missed an 11-hour deal with Gwangju Bank. A rival Gopax saw a possible Jeonbuk Bank partnership fall through that same day.
The “big four” appear to be keen to distance themselves from the rest of the pack by purchasing into the existing traditional financial system. Media observers spoke out about a “highly important” November move by Dunamu to buy a 1% share of the Woori Finance Group, South Korea’s largest commercial banks.
Rival Bithumb was the first platform to poach a top member of the Financial Services Commission’s staff. The FSC, which is the body that regulates the crypto sector in South Korea, is perhaps a sign of the increasing influence crypto exchanges have on the South Korean financial market.