Breaking: Crypto Market Braces for Crash As S. Korea FSC Investigates Upbit

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As a researcher who has witnessed the tumultuous ride of the cryptocurrency market since its inception, I can’t help but feel a sense of deja vu when reading about the latest developments surrounding Upbit and K-Bank. The parallels to the events of 2018 are striking, and history has a way of repeating itself, especially in this fast-paced industry.

On Thursday, it was announced that South Korea’s Financial Services Commission (FSC) plans to examine the monopolistic nature of the country’s cryptocurrency market, primarily focusing on crypto exchange Upbit. This news is significant as Upbit ranks second among global spot cryptocurrency exchanges. Notably, the overall cryptocurrency market has been experiencing a downturn, with Bitcoin (BTC) and Ethereum (ETH) both losing more than 2.3% in value.

Upbit Partnership With K-Bank Under Scanner

On Thursday, October 10th, during a state audit of the National Assembly in South Korea, Democratic Party legislator Lee Kang-il voiced worries about the increasing monopoly in the nation’s cryptocurrency market. He particularly highlighted the significant influence of the country’s leading crypto exchange, Upbit.

In response, the Chairman of the Financial Services Commission, Kim Byung-hwan, acknowledged the issue concerning Upbit’s monopolistic system.

Moreover, Representative Lee mentioned that Upbit has been strengthening its market influence thanks to its alliance with K-Bank. He also voiced worries about a significant amount of K Bank’s funds being held by Upbit, considering the bank’s upcoming initial public offering (IPO). The legislator further stated:

As an analyst, I’d rephrase it as follows: “Among the total 22 trillion won deposited in K Bank, approximately 20% comes from Upbit. In the event that Upbit transactions are halted, there could potentially be a bank run on K Bank due to a significant portion of its deposits being tied to this platform.

In response to the financial partnership between K-bank and Upbit, Lee voiced concerns about K Bank’s choice to provide a 2.1% interest rate on deposits made by Upbit customers, given that their operating profit margin was less than 1%. Furthermore, he argued that this tight bond contradicts the fundamental concept of keeping finance and industry separate.

As a crypto investor, I can confidently say that the thorough evaluation of K-Bank’s listing on our platform has already taken place. Now, we will delve deeply into this matter, leveraging the collective expertise of our Virtual Asset Committee, to ensure a well-informed and comprehensive decision.

Meanwhile, Upbit has been taking steps to ensure compliance in regulatory matters. For instance, they implemented controls against insider cryptocurrency trading in July, all while adhering to the Virtual Asset User Protection Act (VAUPA).

Crypto Market Crash Ahead?

Over the past day, Bitcoin (BTC) has experienced a dip of approximately 2.5%, causing its value to fall below $61,000. This latest drop follows a trend where Bitcoin’s trajectory has changed yet again from reaching around $65,000 this week, indicating that the crypto market is currently under significant selling pressure.

In 2018, Upbit crypto exchange executives were under intense scrutiny due to fraud accusations. This event significantly impacted the cryptocurrency market negatively. Today, with the exchange holding an even greater influence in the worldwide crypto sector than it did in 2018, investors should not dismiss potential future developments.

Right now, there’s a lot of anticipation among investors regarding the upcoming U.S. CPI data release for September. The market currently predicts that there’s less than a 50 basis point chance of interest rate cuts in November. Meanwhile, the altcoin market is experiencing a wave of selling, with top cryptocurrencies dropping around 2% each.

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2024-10-10 07:34