With Dunamu, which operates the virtual asset exchange Upbit, merging with Naver Financial and Mirae Asset Group moving to acquire the virtual asset exchange Korbit, major changes are expected in Korea's virtual asset industry. Bithumb is preparing an initial public offering (IPO), the first among domestic virtual asset exchanges.
According to the virtual asset industry on the 29th, Mirae Asset Group is in talks to acquire Korbit equity held by its largest shareholder NXC (60.5%) and second-largest shareholder SK Planet (31.5%). Korbit currently has a domestic market share in the 0–1% range and lacks a strong presence.
The industry estimates the transaction size at between 100 billion and 140 billion won. A financial sector official said, "If procedures go smoothly, the acquisition is expected to be completed next year."
However, regulation could be a variable. Under the "separation of finance and virtual assets" principle introduced in 2017, financial companies are restricted from participating in virtual asset businesses. The acquiring entity, Mirae Asset Consulting, is a non-financial firm, but it holds 36.92% equity in Mirae Asset Global Investments.
An official at the Financial Supervisory Service said, "Because discussions on (Mirae Asset's) acquisition of Korbit are still at an early stage, we are not specifically determining whether regulations apply."
Dunamu, the operator of Upbit, is proceeding with a merger with Naver Financial. Late last month, the two companies each held board meetings and approved a comprehensive stock exchange plan. The stock exchange ratio is 1 to 2.54; once the exchange is completed, Dunamu will become a wholly owned subsidiary of Naver Financial.
Dunamu recently renewed its virtual asset service provider (VASP) license from the Korea Financial Intelligence Unit (FIU), easing concerns. Earlier, Dunamu was fined 35.2 billion won by the FIU in early this month for violating obligations such as customer due diligence and transaction restriction measures. Last month, there was also a hacking incident in which 44.5 billion won worth of virtual assets were leaked externally. Because of this, the VASP license renewal review alone had been underway for about 1 year and 4 months.
Bithumb, the No. 2 virtual asset exchange in Korea, is planning to list next year. If successful, it would be the first listing of a domestic virtual asset exchange, but the outlook is not bright.
The FIU is currently investigating whether Bithumb neglected its anti-money laundering (AML) obligations while sharing an order book with Australian exchange Stellar. Financial Services Commission (FSC) Chair Lee Eog-weon signaled at a National Assembly audit in Oct. that "if illegalities are confirmed, strict measures will be taken."
Bithumb also clashed with the financial authorities over its coin lending service. The coin lending service allows individuals to use assets they hold as collateral to borrow coins from an exchange for trading. The Financial Supervisory Service (FSS) said, "Please suspend new business until guidelines on the service are issued," but Bithumb reduced the loan limit and kept the service running. In response, the FSS conducted an on-site inspection of Bithumb in late Aug.
On Sept. 30, Bithumb was not invited to a virtual asset industry meeting convened for the first time since FSS Governor Lee Chan-jin took office. The meeting included exchanges smaller than Bithumb as well as corporations that had not yet launched services at the time.