Upbit , a South Korean cryptocurrency exchange based in Seoul’s posh Gangnam district, has climbed to become the top 5 global exchange by volume.
South Korea has benefited from the recent cryptocurrency rally that has spread across global markets, with rumors that the Korean Won has replaced the USD as the most popular currency for swapping Bitcoin and other digital assets reaching a fever pitch.
Upbit Dominates Korean Market Volume
According to a Bloomberg report, more than 80% of South Korea's volume is currently processed on Upbit.
This is a major milestone for Upbit as no other exchange has been able to achieve such dominance in a major crypto hub.
Additionally, Upbit is currently in close competition withCoinbase Global Inc (NASDAQ: COIN), a leading cryptocurrency exchange in the United States.
Last year, Upbit customers accounted for nearly a fifth of all deposits from major banking partners, a move that drew sharp criticism from a South Korean lawmaker.
However, the new law was passed following the arrest of Do Kwon, a South Korean businessman whose stablecoin TerraUSD collapsed in 2022.
Nam HyeonJoon, spokesperson for Bithumb, South Korea's second largest exchange, said:
“Under the new regulatory regime, cryptocurrency exchanges will have to increase their reserves, obtain investor protection insurance, and increase monitoring of suspicious transactions, which requires both Capital and manpower.”
Launched in 2017, Upbit is controlled by fintech firm Dunamu Inc. According to CCData, the exchange now accounts for nearly 5% of total cryptocurrency volume globally, up from 1.4% in January 2021.
Upbit became the first exchange to be registered with the Financial Intelligence Unit in 2021. This was made possible by its partnership with K-Bank, an online lending company.
It is worth mentioning that before registering with the Korean regulator, exchanges need to have a banking partner.
A domestic media report from last year revealed that Upbit accounted for 18% of total deposits at K-Bank, drawing criticism from lawmaker Kim Heegon, who described the bank as “ Upbit’s own safe deposit box” in October.
In an interview, a K-Bank representative said that deposits on the exchange are not used for lending purposes and can be withdrawn at any time.
He added that Upbit only accounts for “a very small portion” of the bank’s total income.
South Korea enforces strict regulations
Starting in May, regulators in South Korea will introduce stricter rules for Token listings on centralized cryptocurrency exchanges (CEX).
Domestic and foreign cryptocurrency exchanges will have to comply with the rules once they come into effect.
The move is part of South Korea's efforts to increase transparency and security in its cryptocurrency market.
As previously reported, under the new guidelines, regulators can require exchanges to remove specific cryptocurrencies from their platforms if they fail to provide adequate information about the digital assets.
Bitcoin News Summary.
