Bithumb Withdraws 4.0% Deposit Fee Rate... Reversed Same Day

Financial Authorities Seem to Have Put the Brakes... Competition Overheated
Legal Community Also Points Out Issues with Additional Payments

Virtual asset exchange Bithumb proposed a groundbreaking annual customer KRW deposit usage fee rate of 4.0%, but retracted it due to concerns over violations of the Act on the Protection of Virtual Asset Users.

On the 23rd, Bithumb announced through a notice, "Additional matters requiring review were found to comply with the Act on the Protection of Virtual Asset Users, so the guidance on raising the deposit usage fee rate to 4.0% per annum has been withdrawn."

Previously, Bithumb had announced that it would pay a final annual rate of 4.0% by adding an additional 2.0% per annum on top of the 2.0% interest generated through management and operation by its partner bank, NH Nonghyup Bank, but soon issued a retraction notice. Accordingly, the deposit usage fee will maintain the previous rate of 2.2% per annum.

This decision is known to have been made following intervention by financial authorities. It is believed that the interest paid independently by Bithumb, in addition to the interest paid by the bank, became problematic.

A virtual asset specialist lawyer stated, "The deposit usage fee is a concept of returning interest accrued from deposits to customers, so additional payments seem to pose issues."

The interest-type usage fee on customer deposits became mandatory with the enforcement of the Act on the Protection of Virtual Asset Users on the 19th. Before the law was enforced, virtual asset exchanges were prohibited from paying their own usage fees to prevent quasi-deposit activities.

The situation is also seen as a result of overheated competition in the industry to raise usage fee rates. When Upbit announced a usage fee rate of 1.3% on the day the law was enforced, the 19th, Bithumb proposed 2.0%, and then Upbit revised its notice to 2.1%. Subsequently, Bithumb raised the usage fee rate to 2.2%, and Korbit also promised 2.5% per annum.