More coin exchanges linked with banks to open: report

An electronic board displays the real-time prices of major cryptocurrencies at a Bithumb customer service center in Seoul, April 4. Yonhap

By Lee Min-hyung

A group of three to four more existing crypto exchanges are expected to make their debuts as ones that offer coin trading services in the Korean won, a media report said Friday.

In Korea, no crypto exchange can operate a coin trading service via the local currency unless they sign a contract with a commercial bank here. Thus, only five exchanges offer such services after securing real-name bank accounts for their users. They are Upbit, Bithumb, Korbit, Coinone and Gopax.

But a number of local media have reported that the incoming administration will join hands with local financial authorities to enable more exchanges to offer such services sometime in the latter half of this year.

Most crypto exchanges have had essentially to shut down their services here after last September, as they failed to sign such contracts with commercial banks. Signing such contracts was in accordance with the Special Financial Information Act, under which the regulatory guideline's grace period ended in September 2021.

Until now, only five exchanges have signed contracts with a group of major lenders, such as K bank, NongHyup Bank, Shinhan Bank and Jeonbuk Bank.

The report said that banks which have not signed such contracts with exchanges ― including Woori, Standard Chartered, Hana and Kakao Bank ― have been in working-level negotiations with exchanges that do not offer the Korean won-trading service.

Given that the incoming administration has spoken of the need to ease crypto regulations here, chances are that more exchanges will be able to compete with the aforementioned five major exchanges upon receiving approval from the Financial Services Commission.

Opening up coin trading services in won to more crypto exchanges would also respond to growing concerns about a monopoly developing here, as Upbit handles more than 80 percent of the total cryptocurrency trading volume in Korea, according to data from Rep. Yoon Chang-hyun of the main opposition People Power Party.

Regarding the media report, however, the presidential transition committee declined to confirm any details.

“We have not made any decision (on expanding the number of exchanges operating the Korean won trading service),” Choi Ji-hyun, a deputy spokesperson of the committee, said in a media briefing. “We are still in internal talks over the specifics of President-elect Yoon Suk-yeol's crypto-related pledges.”