South Korea’s Financial Services Commission (FSC) has initiated an inquiry into Upbit, the world’s second-largest cryptocurrency exchange, amid concerns about its dominant market presence. This investigation comes at a time when the cryptocurrency sector is experiencing notable downward pressure, with Bitcoin and Ethereum both seeing declines exceeding 2.3%.
How Did Upbit’s Partnership Affect Its Growth?
Lawmaker Lee Kang-il from the Democratic Party has raised alarms regarding Upbit’s escalating monopoly during a recent audit session. He pointed out that Upbit’s market control has significantly strengthened following its collaboration with K-Bank.
What Regulatory Steps Has Upbit Taken?
In response to growing scrutiny, Upbit has enacted measures to adhere to user protection laws for virtual assets, aimed at curbing insider trading within the cryptocurrency market. These actions reflect Upbit’s intention to align itself with regulatory guidelines.
Key points to note include:
- Upbit’s partnership with K-Bank has led to a concentration of deposits, amounting to 4 trillion won.
- Concerns about a potential bank run at K-Bank if Upbit ceases operations were raised.
- The cryptocurrency market continues to face selling pressure, with Bitcoin recently falling below $61,000.
The ongoing investigation signals that regulatory pressures may significantly impact the cryptocurrency marketplace, potentially extending to other exchanges. Market participants must remain vigilant as the situation develops.