Bithumb Becomes First Mover Surpassing Industry Leader Upbit
Suspected Connection to 'Abeil Incident' in Background
Bithumb, the second-largest virtual asset exchange in South Korea by market share, has been selected as the first subject of an on-site inspection by the Financial Supervisory Service (FSS). While the virtual asset industry had expected Upbit, the largest domestic exchange, to be the first target, this prediction proved incorrect.
According to the virtual asset industry and financial authorities on the 11th, the FSS recently notified Bithumb of its selection as the first target for the on-site inspection. An FSS official stated regarding the selection background, "Various factors were considered," adding, "The inspection will be conducted according to the manual and will proceed through the usual procedures."
The FSS has previously announced that in selecting on-site inspection targets, it will focus on operators with ▲poor financial conditions, ▲weak internal controls related to virtual asset custody, and ▲concerns about user damages.
The FSS plans to conduct inspections in the second half of this year on two exchanges operating KRW markets, three exchanges operating coin markets, and one wallet/custody operator. Additionally, thematic inspections may be carried out if illegal allegations are raised through reports or other means.
In the market, it is presumed that Bithumb became the first inspection target due to the 'Avail incident' in July. Avail, which was listed on Bithumb on July 23, saw its price surge over 1000% from 236 won to 3,500 won, then plummet 80% in a single day, causing significant investor losses due to extreme price volatility. Particularly, damages were concentrated on domestic exchanges, and Bithumb's negligence in monitoring and management was also criticized. During this process, suspicions arose that a virtual asset industry influencer was behind market manipulation, prompting financial authorities to launch an investigation.
On the other hand, Upbit, operated by Dunamu, remains relatively free from controversy. Upbit recently submitted its business renewal report, maintaining its real-name account partnership bank as the previous K Bank. Other reporting requirements have not changed, so a smooth approval is expected.
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