South Korea Launches Antitrust Investigation into Upbit Exchange

Concerns Over Market Monopoly 

Lee noted that Upbit’s deposits make up a significant part of K Bank’s overall deposits. He criticized K Bank for offering high interest rates to Upbit customers despite the bank’s slim profit margins. K Bank is planning to go public on October 30 and hopes to raise $731.64 million in its IPO. This could be one of the largest stock market launches in 2024. 

Upbit’s Influence and Trading Practices 

Upbit has been in the spotlight before, facing accusations of market manipulation, especially with pump-and-dump schemes involving altcoins. In these schemes, traders inflate the price of an asset to attract investors. They then sell large amounts to profit from the artificially high prices. 

Korean traders are known for using strategies like matched orders to create fake volatility. Some traders even recruit wealthy investors to help inflate prices, which worsens market instability. 

Ki Young Ju, CEO of CryptoQuant, confirmed that these practices are common among South Korean traders. He explained that the country’s strict capital controls encourage traders to use such methods. He also mentioned the “Kimchi premium,” which refers to the price gap between South Korean and overseas exchanges, as another factor that strengthens Upbit’s monopoly in the region. 

The investigation into Upbit’s market dominance could have a significant impact on South Korea’s cryptocurrency industry. The government aims to ensure more fairness and transparency in the market.