Upbit Controls South Korea Market With 80% Digital Asset Trading Volume

Upbit, a leading crypto exchange from South Korea. (Photo; Doc. KoreaTimes).

JAKARTA - The South Korean crypto market has witnessed the emergence of a dominant force that is changing the global competition map. Upbit, a Seoul-based digital asset trading platform, has confirmed its position as market leader by controlling more than 80% of the country's total trading volume. This leadership not only places Upbit in the top five world crypto exchanges, but also rivals giants like Coinbase in terms of trading volume.

According to a Bloomberg report, Upbit subscribers are responsible for nearly a fifth of the total deposits received from its key banking partners last year. Upbit's dominance has attracted attention and criticism, particularly amid South Korea's plans to implement new regulations designed to protect investors, especially after the fall of the TerraUSD stablecoin by 2022.

The new scheduled regulation will take effect in July under the Virtual Asset User Protection Act, which will impose strict requirements on crypto exchanges. These measures include increased reserves, increased investor protection, and monitoring of suspicious transactions.

NamhirJoon, a spokesman for Bithumb, Korea's second-largest trading platform, highlights the challenges faced by this new regulatory framework, including substantial capital and labor needs to meet the requirements.

Simon Seojoon Kim, CEO of Hased, a Korean-based venture capital firm, stressed that upbit-like exchanges that have sufficient resources will find it easier to meet these new standards, which could widen the gap between market leaders and small competitors.

These regulatory challenges have affected international exchanges looking to enter the Korean market. Singapore-based crypto.com recently announced a delay in launches in South Korea, citing the need for further communication with regulators.

This decision was taken following reports on regulatory oversight, with concerns about anti-money laundering practices. Since crypto laws passed in June, small exchanges such as Huobi Korea, Cashierest, and Coinbit have been closed. Analysis of Min Seung Kim from Korbit Research expects Upbit to easily meet new regulations, provided that competition is increasingly focused on the top exchange.

Upbit, founded in 2017 by fintech firm Dunamu Inc., has grown rapidly and become a key player in the crypto market. With the initial support of South Korean internet giant Kakao Corp., and Woori Technology Investment, Upbit has succeeded in attracting the attention of local and global investors. Upbit's success in controlling the South Korean crypto market shows the tremendous potential of this industry and how appropriate regulations can shape the future of digital asset trading.