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South Korea to put stricter regulations on Dunamu over Upbit monopoly concerns

The Korea Fair Trade Commission (KFTC) will put Dunamu, owner of the country’s largest digital currency exchange Upbit, under high scrutiny. The main reason is the firm’s monopolistic market share.

According to a law in South Korea, the government will put limitation on companies with total assets of higher than KRW10 trillion, worth nearly $8.07 billion. This is to prevent corporations from having too much financial power while scrutinizing the firm more closely. In addition, companies must share crucial information such as major deals, board decisions, and shareholders with the authorities.

On the other hand, Dunamu’s 2021 business report shows total assets of KRW10.15 trillion ($8.19 billion), just over the country’s threshold. Last year, the South Korean digital currency giant showed a significant improvement as the company’s total assets were worth only KRW1.38 trillion or roughly over $1.1 billion.

Furthermore, according to CoinMarketCap, Upbit has a market share of 78% in terms of 24-hour trading volume, while the country’s regulator considers a share of higher than 50% as a monopoly.

The KFTC does not consider Dunamu and other digital currency firms as “financial businesses,” nor does it consider the customers’ assets as the firms’ own assets, according to a Forkast News report on Wednesday.

South Korea’s President-elect promised deregulation

South Korean authorities have been tightening the grip on digital asset-related businesses under Moon Jae-in’s administration since 2017. The new President-elect Yoon Suk-yeol, who was the ex-prosecutor general of South Korea, shows a promising future for the virtual currency fanatics of the country.

Yoon was elected last month with 48.6% votes and won with less than a percentage ahead of the Democratic Party’s liberal candidate Lee Jae-myung. Yoon, who will take the country’s leadership in May, is considered a pro-digital currency and non-fungible token (NFT) fan with guarantees of deregulations. An expert said that both candidates have been distancing from Moon’s negative policies and are both digital asset fans.

With all the negative regulations, South Korean digital assets reached the $46 billion mark in 2021. Gopax exchange CEO Junhaeng Lee believes that the industry will just “move forward” with the new president. 

“There will be more consumer protection [among other things] which we feel more comfortable with,” he told Bloomberg.

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