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A South Korean legislator has charged the country’s primary regulator with “playing Squid Game” with local cryptocurrency exchanges, suggesting that Upbit is flourishing at the detriment of its competitors.
According to Newsworks and Chosun Ilbo, Lee Kang-il, a member of the Democratic Party of Korea, criticized the Financial Services Commission (FSC).
Lee made these remarks during a session where FSC Chairman Kim Byung-hwan was being questioned by the National Assembly’s State Affairs Committee on October 10.
Squid Game: Regulators Are Eliminating Competition, Claims MP
Lee accused the FSC of permitting Upbit to establish a “monopoly.” He stated that the exchange has captured a significant portion of the market while its competitors have diminished.
“The Financial Services Commission is playing Squid Game here. It is saving only one company. And it is killing all the rest.”
Democratic Party of Korea lawmaker Lee Kang-il
Lee was making a comparison to the globally popular series Squid Game, a dystopian thriller where participants face deadly consequences for losing. The legislator remarked:
“Upbit’s crypto deposit sales commission constitutes over 70% of the total in the industry. This effectively positions it as the sole leader in the market. Under the Monopoly Regulation and Fair Trade Act, this qualifies Upbit as a monopoly.”
Kim acknowledged that this was a valid concern and stated he would “examine the monopoly structure” of the cryptocurrency market and Upbit’s role within it.
“I am aware of the problem.”
FSC Chairman Kim Byung-hwan
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South Korean Crypto Market Could Be “Marginalized”
Lee further asserted that South Korea risks losing its position as “a leader in the cryptoasset market.” He warned that the country might become “marginalized.”
“Upbit is the largest exchange in South Korea and the second largest globally. However, domestic exchanges, whether operating in the fiat market or crypto-to-crypto markets, are all struggling. This is due to the excessive concentration of the crypto market on a single company.”
Democratic Party of Korea lawmaker Lee Kang-il
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Lee also criticized Upbit’s partner bank, K Bank, and its plans to initiate an initial public offering (IPO) in the latter half of this year.
The legislator noted that Upbit customers represent approximately 20% of K Bank’s deposits, adding:
“If Upbit transactions are halted, it would lead to a bank run at K Bank. […] The [relationship] between Upbit and K Bank contradicts the principle of separating finance and industry. This principle was established to prevent industrial capital from influencing banks.”
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Kim asserted that the FSC would conduct a “thorough review” of the K Bank IPO proposal following Lee’s remarks.
The legislator went on to urge regulators and government officials to assist domestic crypto exchanges in establishing “overseas expansion channels.” He stated:
“The primary factor contributing to the deepening monopoly situation in the cryptoasset market is the limitation of [firms’] activities to the domestic market. This is undermining global competitiveness. Due to a lack of connections with global exchanges, liquidity connectivity with the dollar and other fiat currencies is very low.”
Trading volumes on the Upbit crypto exchange over the past month. (Source: CoinGecko)
Overseas Expansion a Must, Lawmaker Insists
Lee asserted that stringent regulation of the domestic market was “blocking funds” from “coming in from overseas.”
He concluded that “trillions” of Korean won “per year” are transferred from “domestic platforms” to foreign exchanges.
“However, there are almost no instances of funds moving in the opposite direction. This is a serious issue.”
Lee
This is not the first occasion South Korean lawmakers have accused Upbit of evolving into a “monopoly.”
As recently as July this year, additional Democratic Party MPs expressed their concerns regarding Upbit’s “potential monopoly status.”
The post South Korean Lawmaker: Regulators Playing Squid Game With Domestic Crypto Exchanges appeared first on Cryptonews.
