21 Apr Korea’s Largest Crypto Exchange Could Face Stricter Regulations: Report
The Korea Fair Trade Commission (KFTC) is reportedly ready to impose tougher regulations on Dunama – the parent company of the country’s largest crypto exchange, Upbit – by classifying it as a “large enterprise.” The authority deems firms with more than 5 trillion won ($4.03 billion) assets subject to stricter regulatory scrutiny, requiring them to “disclose information on major intracompany dealings, board decisions, and shareholders.”
Dunamu held 10.15 trillion won (US$8.19 billion) as its assets in 2021, slightly above the 10-trillion threshold that exempts businesses from being categorized as “companies subject to limitations on mutual investment.”
Besides being barred from conducting mutual investment, the giant will face other restrictions on debt guarantees, cross-shareholding, etc.
With only 1.38 trillion won of assets under its management as of 2020, Dunaum’s rapid growth last year attracted attention from the Korean watchdogs.
The authorities obligated companies with over 5 trillion won (about US$4 billion) in assets to disclose information on major intracompany dealings, board decisions, and shareholders under the Monopoly Regulation and Fair Trade Act.
According to sources acquired by the Korea Herald, the KFTC is prone to regulate Dunamu as a “non-financial business” and consider Upbit’s customer deposits as part of its assets. Under this circumstance, Dunamu will expectedly face austere regulations due to the colossal size of its managed assets.
With Upbit accounting for 78% of the market share in South Korea, Dunamu posted a net income of 2.2 trillion won in 2021, positioning the company as one of the most attention-grabbing crypto unicorns in the country.
South Korea’s president-elect Yoon Suk-yeol has openly voiced support for the crypto industry. In a public appearance during the campaign, the former prosecutor said that those who generate profits of less than $40,000 per year from crypto trading would be exempt from paying taxes.
It was seen as the new president’s friendly gesture towards the industry as he had previously pleaded to ease regulations on cryptocurrencies.
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