A South Korean lawmaker, Lee Kang-il, has accused the nation’s top regulator, the Financial Services Commission (FSC), of enabling a monopoly to form within the domestic crypto exchange market. Lee accused the FSC of favoring Upbit and allowing it to thrive at the expense of its competitors. Upbit, the largest exchange in South Korea, has been able to corner the market share, causing its rivals to fade away. Lee made an analogy, stating that FSC’s actions were akin to playing the deadly game depicted in the international drama hit Squid Game.
During the questioning of FSC Chairman Kim Byung-hwan by the National Assembly’s State Affairs Committee, Lee expressed concerns about Upbit’s monopoly position and the potential negative impact on the crypto market in South Korea. He warned that the country risked losing its status as a leader in the cryptoasset market and becoming marginalized if action was not taken to address the concentration of market power in Upbit’s hands. Lee also criticized Upbit’s partner bank, K Bank, and its plans for an initial public offering (IPO), highlighting the risks associated with the close relationship between the two entities.
Kim Byung-hwan acknowledged the concerns raised by Lee and promised to investigate the alleged monopoly structure in the crypto market, as well as Upbit’s dominant position. The FSC Chairman pledged to conduct a thorough review of K Bank’s IPO bid in light of the lawmaker’s comments. Lee emphasized the importance of overseas expansion for domestic crypto exchanges, highlighting the need for greater global competitiveness and liquidity connectivity with other fiat currencies. He urged regulators and government officials to facilitate the development of overseas expansion channels for local exchanges.
Lee highlighted the detrimental impact of tight regulations in the domestic market, suggesting that it was hindering foreign investment into Korean crypto exchanges. He raised concerns about the significant outflow of funds from domestic platforms to overseas exchanges, leading to a lack of capital inflow in the opposite direction, which he deemed a serious issue. Lee called for measures to address the deepening monopoly situation in the cryptoasset market and promote greater connectivity with global exchanges to improve the competitiveness of South Korean exchanges internationally. The lawmaker’s statements reflect ongoing concerns among South Korean MPs about Upbit’s growing dominance and the potential risks associated with a single exchange controlling a significant portion of the market.
