South Korea’s leading cryptocurrency exchange, Upbit, has witnessed a historic dip in its market share volume. It has fallen below 70% for the first time since January.
The shift is attributed to intensified competition in the Korean market. Exchanges like Bithumb and Korbit have been aggressively implementing zero-fee promotions over the past two months.
Upbit’s market share stood 65.7%, while Bithumb experienced a remarkable upswing of 32.7% in volume. It signals a noteworthy shift in the dynamics of the South Korean crypto landscape.
Legal troubles for South Korean exchanges
The crypto saga in South Korea took a darker turn in May 2023 when authorities raided the offices of Upbit and Bithumb as part of an investigation involving politician Kim Nam-kuk.
The Financial Services Commission reported a list of crypto transactions executed by Kim. They alleged that Kim liquidated over $4 million in crypto assets before the enforcement of the “Travel Rule” by the Financial Action Task Force in March 2023. The revelation sparked domestic outrage over a potential conflict of interest.
Adding to the turbulence, Upbit temporarily suspended all deposit and withdrawal services for the Aptos crypto token in September 2023. The suspension followed the detection of suspicious activity, with an elaborate fake airdrop distributing a token similar to Aptos to approximately 400,000 wallets.
Investors found themselves on a deceptive website, “ClaimAPTGift(dot)com,” and a circulating screenshot revealed Upbit crediting these fake tokens, labeled as “ClaimAPTGift,” based on blockchain data. Upbit assured users that services would resume post-wallet maintenance.
Recent events underscore the challenges faced by major exchanges. It calls for a reevaluation of South Korea’s security measures and policies.
Korbit has also emerged as a big player. The exchange has leveraged strategic moves to capture a larger share of the market. Additionally, reports suggest that Coinone is gearing up for a platform upgrade to enhance user experience and security. It will further intensify the competition among South Korean exchanges.
