Busy Chasing Binance... National Assembly 'Again' Targets Upbit

Borderless Virtual Assets... Domestic No.1 Ranks 5th Overseas
Direct Competition Among Global Virtual Asset Exchanges
Only Worrying About Regulations... Korean Customers Lost Abroad

Lee Kang-il, a member of the Democratic Party of Korea, speaking at the National Assembly's Political Affairs Committee audit [Image source=Yonhap News]

At this year's National Assembly's Political Affairs Committee audit, Upbit, the country's number one virtual asset exchange, was once again under scrutiny due to its high market share. The virtual asset industry emphasizes the need to understand the situation of domestic exchanges that compete directly with overseas companies without being constrained by national borders.

According to the virtual asset industry on the 29th, during the National Assembly Political Affairs Committee's Financial Services Commission audit on the 10th, Lee Kang-il, a member of the Democratic Party of Korea, argued that "Upbit's sales exceed 70% of the total sales of domestic virtual asset exchanges," calling for regulation of monopolies.

During the audit, Lee Kang-il raised his voice, stating that the Financial Services Commission's virtual asset policies have caused domestic market monopolization and loss of global competitiveness. He also argued that the Fair Trade Commission should consider regulating monopolies in this regard.

On the other hand, the virtual asset industry claims that since they compete directly with global exchanges 24 hours a day, making monopoly claims based on domestic market share is unfair.

According to the virtual asset market data site CoinMarketCap, as of the morning of the 29th, Upbit ranks 5th in the spot market based on 24-hour trading volume. Binance is first, Coinbase second, Bybit third, and OKX fourth. Bithumb, the second largest domestic exchange, ranks 18th globally. This is why it is difficult to view high domestic market share as monopolistic behavior.

According to the U.S. Wall Street Journal (WSJ), in May 2023, South Korea accounted for 13% of Binance's global trading volume by country, ranking second after China (20%). This indicates that many domestic investors use overseas virtual asset exchanges.

The fact that many investors prefer overseas exchanges that support futures or margin trading is also noted by academia. Domestic exchanges only support spot trading under current law. Professor Lee Sang-seung of Seoul National University pointed out at last year's 'DCON 2023: Digital Asset Conference for Healthy Market Formation' that investors tend to use both domestic and overseas exchange accounts simultaneously.

A virtual asset industry official said, "If the government and financial authorities remain focused solely on regulatory perspectives and fail to timely prepare industry promotion measures, all virtual assets of domestic investors will flow overseas, and domestic operators will all be eliminated."