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The Financial Services Commission (FSC) of South Korea has announced an investigation into the monopolistic structure surrounding the cryptocurrency market, particularly focusing on Upbit. This development could pose significant challenges for Upbit, which is the world’s second-largest spot cryptocurrency exchange. Alongside this scrutiny, the overall cryptocurrency market is experiencing selling pressure, with Bitcoin 
$103,153 and Ethereum 
$2,338 both losing over 2.3% in value.
Reviewing the Upbit-K-Bank Partnership
Democratic Party lawmaker Lee Kang-il criticized Upbit’s growing monopoly in the cryptocurrency market during a national assembly audit. He highlighted how Upbit has increased its market dominance following its partnership with K-Bank.
FSC Chairman Kim Byung-hwan acknowledged the issues concerning Upbit’s monopolistic system. He also mentioned that K-Bank’s significant deposit share with Upbit would be subject to review.
Regulatory Measures by Upbit
In July, Upbit took steps to comply with the virtual asset user protection law, implementing measures to prevent insider trading in cryptocurrencies. These actions demonstrate a commitment to aligning with the regulatory environment.
“Of K-Bank’s 22 trillion won deposits, 4 trillion won are with Upbit. If Upbit operations cease, it could trigger a bank run at K-Bank,” stated Lee Kang-il.
Lee criticized K-Bank for offering a 2.1% interest rate to Upbit’s clients, stating this violates the separation of finance and industry given the bank’s low profit margins.
The cryptocurrency market remains under selling pressure as Bitcoin dips below $61,000. Following a past investigation into Upbit executives for fraud allegations in 2018, the exchange now holds a stronger global position. As investors await the U.S. CPI data release for September, altcoins are also experiencing around a 2% decline.
Recent developments in the cryptocurrency market indicate that regulatory scrutiny could have a substantial impact. The situation surrounding Upbit suggests that other exchanges may face similar investigations. It is crucial for market participants to closely monitor the evolving dynamics.
