“Reliance on Upbit Could Hinder New Okay Bank’s IPO Attempt, According to Report”

Okay Financial institution, a prominent neobank in South Korea, may face challenges in its latest attempt to initiate an initial public offering (IPO) due to its “dependence” on its partner, the cryptocurrency exchange giant Upbit.

According to Busan Ilbo, Okay Financial institution is set to make a third attempt to go public following a board meeting that took place on March 12.

Okay Financial institution IPO: Will Third Time Be the Charm for Neobank?

The bank’s first attempt to launch an IPO occurred in February 2023, followed by another attempt in October 2024.

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— The Korea Herald 코리아헤럴드 (@TheKoreaHerald) March 13, 2025

After the second attempt, some South Korean media outlets seemed to attribute the setback to the deal with Upbit, asserting that Okay Financial institution’s excessive reliance on Upbit’s business was “to blame.”

Okay Financial institution had to pause its bids on both occasions. Nevertheless, the bank is committed to making a third attempt this year as the deadline for its regulatory approval approaches.

However, the media outlet cited “market sources” predicting that Okay Financial institution will struggle to successfully complete its IPO once again.

They suggested that Okay Financial Bank’s “strong dependence” on its banking relationship with Upbit could be a significant factor.

The Korea Exchange’s KOSPI index performance over the past month. (Source: Google Finance)

Upbit: A ‘Monopoly?’

Upbit is the largest cryptocurrency exchange in South Korea by market share and trading volume. During the coronavirus pandemic, the partnership between Okay Financial Bank and Upbit proved to be highly successful.

South Korean regulations mandate that all fiat-trading cryptocurrency exchanges establish agreements with domestic banks, which provide exchange clients with social security number-verified fiat on/off ramps.

During the pandemic, the two entities were the only banking-exchange pair capable of offering new customers the ability to open crypto wallet-linked bank accounts online.

At that time, other banks still required new clients to establish accounts in person at physical branches.

Since then, other banks have followed suit and begun allowing their customers to open crypto exchange-linked bank accounts online.

However, Upbit’s dominance has shown no signs of diminishing, with some lawmakers asserting that the exchange has effectively become a “monopoly.”

Upbit trading volumes over the past 12 months. (Source: CoinGecko)

Long-term Profitability

The media outlet described Okay Financial Bank’s “dependence” on Upbit as “excessive,” noting that this was “one of the reasons” behind “poor demand forecasts.” The outlet stated:

“The fact that a significant portion of Okay Financial Bank’s revenue relies heavily on Upbit raises concerns about its ability to maintain profitability in the long term. Upbit accounts for approximately 20% of Okay Financial Bank’s deposit balance. There are worries that it could face a ‘bank run’ if there is significant volatility in the cryptocurrency market.”

The media outlet further mentioned that Upbit’s recent increase in fiat deposit interest rates could also have a “negative impact on Okay Financial Bank’s profitability.”

Last month, another media outlet reported that several “traditional” banks are observing the situation at Upbit and Okay Financial Bank.

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— Bloomberg (@business) March 13, 2025

Traditional Banks Circling

The current agreement between the two is set to expire in October, with several financial providers currently “weighing their options.”

If that is the case, they may be encouraged by recent developments at Bithumb, Upbit’s closest competitor. The exchange recently terminated its partnership with NongHyup Bank in favor of an agreement with Kookmin, South Korea’s largest banking entity.

The media outlet noted that other factors could also hinder Okay Financial Bank’s IPO efforts. These include “sluggish stock market prices” due to “internal and external uncertainties.”

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— Reuters (@Reuters) March 13, 2025

Okay Financial Bank previously targeted a valuation of 4 trillion won ($2.75 billion) in its most recent IPO attempt. “Market insiders” were quoted as suggesting that the valuation “should be reduced by at least 1 trillion won ($687 million).”

This could pose a challenge, according to Busan Ilbo. It explained that sources indicate its financial investors are likely to object if a lower valuation is requested.

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