Lee Yeon-woo is a financial journalist at The Korea Times. Her wide range of reporting includes policies, macroeconomics, stock market, companies and even crypto. She is passionate about connecting the dots in Korean finance and making it easier for foreign nationals to understand. Based on her previous experience as a national reporter, she also has a keen interest in social issues within the sector, including gender equality and ESG. Your tips and insights are always appreciated. You can send them to yanu@koreatimes.co.kr.
INTERVIEW BitGo to enter Korea with global expertise, local insight
BitGo Korea CEO Lee Young-ro speaks to The Korea Times at the company's headquarters in Seoul, Sept. 6. Courtesy of BitGo Korea
By Lee Yeon-woo
Operating in Korea as a foreign entity can be a struggle. But when you're in the crypto industry, where the market is still forming and regulations are yet to be completed, the barriers can be even higher.
Among various crypto businesses trying to venture into the Korean market, BitGo — a virtual asset custody company established in 2013 — has made some unusual moves. Earlier this year, BitGo launched a joint venture with Hana Bank, forming BitGo Korea.
The company moved one step further in early September by securing investments from Hana Financial Group and SK Telecom, the country's leading financial and telecommunication giants. The two entities acquired 25 percent and 10 percent stakes in BitGo Korea, respectively.
The partnership is expected to facilitate smoother interactions with regulators and the local community, according to Lee Young-ro, CEO of BitGo Korea. He noted that BitGo recognized from the get-go that the business will not be successful unless it truly becomes part of Korean culture.
The Korea Times secured an exclusive interview with Lee after his appointment in early September.
"We want to bring what we consider one of the best in the world in terms of our experience of know-how and security. But in Korea, we need the help of two local players to understand the Korean market," Lee said.
"Our job is to not make assumptions and say, 'Oh, just because it's worked in the U.S., it should work in Korea. That's not what we're trying to do. We're trying to accept and work with Korea where it is today and build a product and service that is suitable for Korea at this time."
Lee brings about two decades of background as a private equity lawyer in New York, Asia and Europe, and experience in launching two startups, NextSeed and Brassica. His expertise lies in understanding legal and regulatory issues and analyzing how they can be applied to technology.
Jeong Jae-uk, head of AI Digital Strategy Division at Hana Financial Group, speaks during a session at Korea Blockchain Week 2024 at the Grand Walkerhill Seoul, Sept. 3. In addition to Jeong, from left, BitGo Korea CEO Lee Young-ro, BitGo co-founder and CEO Mike Belshe and Oh Se-hyeon, executive vice president of SK Telecom, attended the session. Courtesy of Factblock
"We're just getting started. In the coming months, we will strengthen our overall presence," Lee said.
For BitGo to operate a virtual asset custody service in Korea, it must obtain registration as a Virtual Asset Service Provider (VASP), which is currently in progress and expected to be completed next year. BitGo Korea aims to expand its operations by starting with custody services and eventually branching into other financial services.
The foremost mission would be to gain trust. Many Koreans are still concerned about the security and safety of virtual assets. They are also not familiar with the custody service itself.
But the custody is a sense of security, Lee explained.
"When people are dealing with things that are so fast or so easy, it seems they don't necessarily think about security until something goes wrong. And that's exactly what happened, obviously during the FTX crisis and in Korea, there have been certain projects that unfortunately didn't go so well."
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"When you lose because you made the wrong investment, that's on you. But if you lose because someone else did something, whether they stole that asset or hacked, that's a whole different problem," Lee said.
He emphasized that BitGo's custody service not only guarantees physical security but also legal protection for the assets, unlike several digital custody platforms that operate based on software.
"Our business model and philosophy depends on how do we work with regulators to provide the legal protection as far as the security protection. We hope to do the same in Korea, working with our partners and regulators," Lee said.
"Because at the end of the day, we want Korea to have a very, very successful crypto or blockchain industry. Hopefully, we can be part of that by providing more assurances, more comfort, more security to both the investors and the individuals."
BitGo currently manages around $70 billion in assets, with a cumulative transaction volume of about $3 trillion. Notably, around 20 percent of global on-chain Bitcoin transactions are processed through BitGo's infrastructure.