Scrutiny on South Korean Crypto Exchange Upbit over Monopoly Concerns

​The South Korean crypto exchange Upbit is currently under scrutiny by lawmakers, with concerns raised about its potential monopoly status. MP Min Byeong-deok, a member of the National Assembly's Political Affairs Committee, highlighted that Upbit accounts for approximately 60% of South Korea's total trading volumes as of July. Despite a decline from over 80% in October last year, worries about monopolization persist.

Min's concerns extend to Upbit's banking partner, K Bank, which commands a significant market share in crypto-related banking transactions. Data from Min's office reveals that K Bank held 76.87% of the crypto sector market last year, a substantial increase from 69% in 2022 and 73% in 2021. In stark contrast, commercial bank Nonghyup (NH) saw its market share plummet from 95% in 2020 to 18.51% last year.

K Bank's exclusive partnership with Upbit has been particularly lucrative, bolstered by a neobanking platform that facilitated online account creation, especially during the pandemic. Efforts by neobanking rival Kakao Bank, in partnership with Coinone crypto exchange, have yielded only about 3% market share.

Upbit and its operator Dunamu have previously faced monopoly-related investigations from lawmakers and the Fair Trade Commission (FTC). In May 2022, Upbit was designated as the domestic crypto sector's first official "conglomerate" by the FTC, imposing restrictions on equity investments and loan guarantees with affiliate firms.