New Cryptocurrency Exchanges Proliferate in South Korea Despite Regulation
New cryptocurrency exchanges are rushing to launch in South Korea despite regulatory uncertainty due to high demand and lucrative business models. Ten crypto platforms are expected to open for business in the first half of this year, including two run by Kosdaq-listed companies.
New Exchanges Entering the Market
Despite regulatory uncertainty, new entrants are hurrying to launch cryptocurrency exchanges in South Korea. “An increasing number of information technology (IT) companies, such as gaming and security, have declared to enter the cryptocurrency exchange market,” Business Korea reported on Monday.
Two Kosdaq-listed companies, in particular, are “accelerating the establishment of [their crypto] exchanges,” the publication noted. Nex G and Hanbit Soft are currently building security and anti-money laundering (AML) systems in order to run cryptocurrency exchanges. Both expect to launch their exchanges in March, the news outlet conveyed and quoted a Nex G official saying:
We are planning to operate the exchange dubbed ‘Nex Coin’ and we already established the corporation last week. We will set up all the systems provided by a normal financial institution such as anti-money laundering and security control systems.
Huge Profits Drawing Exchanges
“Under the current electronic commercial law, companies can operate a cryptocurrency exchange when they register it as telemarketing business to a local government,” Business Korea explained.
South Korea has four major cryptocurrency exchanges and many small and medium-sized ones. Bithumb has long been the country’s largest crypto exchange by volume. However, Kakao Corporation-backed Upbit claims to have overtaken its volume in December. Other major exchanges are Korbit and Coinone. The Digital Times noted early this month:
There are about 30 virtual currency exchanges currently operating in Korea, and there will be more than 10 additional [exchanges] opening in the first half of this year.
On top of Nex Coin and Hanbit Soft, other exchanges opening in the first half of this year include Zeniex and Komid. The former said it will launch this month. The latter opened for business on January 5. Immediately the platform’s “homepage was paralyzed due to a surge in access,” according to Yonhap. “The web server had more than 100,000 people” trying to access the site, Komid explained.
The news outlet pointed out that “huge virtual currency commission income” is the primary reason why many companies are opening up cryptocurrency exchanges. “In the case of Upbit and Bithumb, the largest exchanges in Korea, daily average commission income is estimated at 3.6 billion won and 2.6 billion won, respectively.”
What do you think of these new exchanges launching in South Korean? Let us know in the comments section below.
Images courtesy of Shutterstock, Nex Coin, Zeniex, and Komid.
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