Upbit Faces Monopoly Investigation in South Korea

South Korean lawmakers have launched an investigation into Upbit, the nation's largest cryptocurrency exchange, amid concerns about its monopolistic influence in the virtual asset market.

Financial Services Commission head Kim Byung-hwan announced the probe during a National Assembly session, following remarks from lawmaker Lee Kang-il about Upbit’s significant deposits at K Bank, which make up 20% of the bank’s total.

This scrutiny comes as K Bank prepares for a major IPO, raising questions about its reliance on Upbit for deposits and the reasonableness of offering high interest rates given its low profit margins.

The commission will examine these issues more closely through its Virtual Asset Committee.

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Upbit has faced scrutiny for its role in pump-and-dump schemes involving lesser-known altcoins, with some traders using manipulative tactics to inflate asset prices.

Ki Young Ju, CEO of CryptoQuant, noted that strict capital controls in South Korea exacerbate these practices, potentially isolating local exchanges further and solidifying Upbit’s market dominance.

Alexander Stefanov