Nomura and Brevan Howard back Polygon-powered Libre Protocol

Kbank’s Upbit Customer Deposits Total $2.2BKbank, an internet-only bank in South Korea, is facing criticism due to its relatively high proportion of cryptocurrency customer deposits compared to other banks. Kbank reportedly manages approximately KRW 3 trillion (equivalent to $2.2 billion) in deposits from customers of cryptocurrency exchange Upbit, which accounts for about 18% of its total customer deposits.This percentage stands out, being notably higher than other banks that provide accounts to the other four crypto-to-fiat exchanges in Korea. That is according to a report by Maeil Business Newspaper, which obtained documents submitted to lawmaker Kim Hee-gon by the Financial Services Commission (FSC).According to Korean law, crypto exchanges must secure real-name bank accounts from banks to offer crypto trading services against the Korean won. Kbank offers its accounts to Upbit, the dominant player in the Korean crypto market.Photo by David McBee on PexelsNotable exposure to crypto exchangeThe FSC documents showed that Kbank’s Upbit customer deposits totaled KRW 3.09 trillion, making up 18% of its total deposits, which amount to KRW 17.2 trillion.In a striking contrast, Nonghyup Bank had 0.2% of its deposits, equivalent to KRW 557.8 billion, in Bithumb, which is the nation’s second-largest cryptocurrency exchange. Kakaobank, another internet-only bank, had 0.3% (KRW 112.2 billion) of its deposits in Coinone. Shinhan Bank held 0.01% (KRW 43 billion) in Korbit, and Jeonbuk Bank had a similarly small 0.02% (KRW 4.2 billion) in Gopax.Lawmaker Kim pointed out that Kbank has become a bank dedicated to crypto trading. Kim proposed that financial authorities take proactive measures to assess the potential risks that may emerge when Kbank utilizes Upbit customer deposits as a basis for offering credit loans. Such risky financial practices could potentially result in higher loan defaults and the emergence of a greater number of individuals with poor credit histories, which could ultimately jeopardize the stability of the financial market.Regulatory gapThe current Financial Transaction Reporting Act mandates that virtual asset service providers (VASPs) segregate customer deposits from their own assets as a measure to combat money laundering. However, it has been noted that there are regulatory gaps stemming from the absence of specific guidelines for the custody of these deposits.According to the Financial Supervisory Service (FSS), Nonghyup and Kakaobank store deposits in separate accounts within the bank. On the other hand, Kbank and Jeonbuk Bank keep deposits in corporate accounts under their respective exchange partners’ names.When deposits are stored in separate accounts within the bank, only the bank has access to those funds, and they are essentially operated in a manner similar to a trust, preventing the bank from using the funds arbitrarily. In contrast, funds held in corporate accounts can be used by the bank as a source for lending. Lawmaker Kim warned that in scenarios such as exchange bankruptcies or similar situations, banks holding customer funds in corporate accounts could face difficulties in ensuring customer protection.Each of these banks receives reserve funds from crypto exchanges in anticipation of potential compensation requirements in the event of unforeseen losses. The FSS states that as of the end of last month, the reserve amounts held by each bank were as follows: Kbank had KRW 200 billion, Nonghyup Bank had KRW 100 billion, Kakao Bank had KRW 73 billion, and both Shinhan Bank and Jeonbuk Bank had KRW 30 billion.Kbank’s Upbit customer deposits are approximately 72 times larger than Shinhan Bank’s Korbit customer deposits. However, the reserve amounts held by Kbank are only 6.7 times greater than those held by Shinhan. Lawmaker Kim emphasized the importance of banks maintaining reserve funds that are proportional to the customer deposits held in their partner crypto exchanges.Signs of recoveryMeanwhile, the Korean cryptocurrency industry, which faced a downturn in the latter half of last year due to events like the Terra collapse and FTX’s bankruptcy, has exhibited signs of recovery in the first half of this year.The Financial Intelligence Unit (FIU) of the FSC recently reported that the cryptocurrency market cap in South Korea has reached KRW 28.4 trillion as of the end of June this year. This reflects a 46% increase compared to the end of last year when it stood at KRW 19.4 trillion. Additionally, the total operating profit of domestic exchanges surged by 82% to KRW 227.3 billion over the past six months, compared to the previous figure of KRW 124.9 billion.The total market’s max drawdown (MDD) was 62%. MDD assesses the extent to which an asset has declined in value from its highest point to its lowest point within a specific time frame, before experiencing a recovery. The FIU considers this MDD to be high, urging investor caution.

KakaoBank to Conduct Routine Due Diligence on Crypto Exchange CoinoneKakaoBank, one of South Korea’s Internet-only banks, is set to conduct a routine due diligence examination on cryptocurrency exchange Coinone from May 8 to 9, according to crypto media Digital Asset.Photo by Markus Winkler on UnsplashThe mobile bank told Digital Asset that the forthcoming due diligence is unrelated to either the alleged illicit token listings involving former Coinone employees or the exchange’s sole relisting of the WEMIX token in February, which had been delisted from major Korean crypto exchanges due to questionable information about the token’s circulating supply.In Korea, crypto trading platforms supporting Korean won trading are legally obligated to obtain real-name bank accounts from a bank. Last August, KakaoBank signed a one-year contract with Coinone to provide such accounts to the exchange, and the bank will need to decide whether it will extend the contract before August this year.A Coinone official said that the exchange has not undergone any routine due diligence checks from KakaoBank since the contract was signed last year.The upcoming examination is expected to address concerns stemming from rumors that KakaoBank might reconsider its contract with Coinone in light of the bribery scandal that involved two former Coinone personnel and two brokers.

Andreessen Horowitz is deepening its bet on Asia’s retail crypto boom, even as trading on South Korea’s largest exchanges has cooled from last year’s peaks. The firm’s crypto arm, a16z crypto, said in a press release that it has opened its first Asia office in Seoul, citing South Korea’s high level of retail participation. Nearly one in three South Korean adults owns cryptocurrency, exceeding the share of stock investors, according to the firm. The move comes as the broader Asia-Pacific region cements its role as a hub of grassroots crypto activity, a trend highlighted in Chainalysis’ 2025 Global Crypto Adoption Index.Photo by Brady Bellini on UnsplashAltcoin-heavy retail marketSouth Korea has been a major contributor to that growth. Bloomberg reported in October that digital assets have increasingly become a long-term savings vehicle for many South Koreans, particularly those trying to purchase homes. Trading on local platforms remains heavily skewed toward higher-risk altcoins, which account for more than 80% of total volume across domestic exchanges. Still, overall activity has dropped sharply over the past year. A November report from Wu Blockchain said trading on Upbit, the country’s largest exchange, is down about 80% from a year earlier. The platform averaged $1.78 billion in daily volume in November 2025, compared with roughly $9 billion in December 2024. Bithumb, the second-largest exchange, saw a similar pullback, with average daily volume falling from $2.45 billion last December to about $890 million this November. Some of that retail liquidity appears to have rotated into equities, with the benchmark KOSPI index up more than 72% year-to-date. Asia’s wealthy to increase crypto exposureEven as spot volumes recede, higher–net–worth investors across the region are signaling longer-term interest. Sygnum’s APAC HNWI Report 2025, cited by Cointelegraph, found that 60% of surveyed high-net-worth individuals plan to increase their crypto exposure over the next two to five years. The report said 87% of respondents already hold digital assets; about half allocate more than 10% of their portfolios, and the average allocation is around 17%. The survey included 270 participants with more than $1 million in investable assets or extensive professional investing experience, drawn from ten Asia-Pacific markets led by Singapore and including Hong Kong, Indonesia, South Korea, and Thailand. Overall, 90% of respondents said they view digital assets as important for long-term wealth preservation and legacy planning, rather than primarily as a speculative trade. Anchored by the new Seoul office, a16z crypto said it plans to provide go-to-market support for portfolio companies seeking to expand in Asia, including help with distribution, partnerships and community building. The effort will be led by Park Sung-mo, whose previous roles include positions at Monad Foundation and Polygon Labs, as Head of APAC go-to-market. Pakistan looks to crypto for financial modernizationPolicy debates elsewhere in Asia also reflect growing interest in digital assets' economic role. At the Bitcoin MENA Conference on Dec. 9, Pakistan’s Virtual Asset Regulatory Authority chairman Bilal Bin Saqib said the country needs to move beyond conventional economic structures and leverage digital assets as a new source of momentum, according to Cointelegraph. He argued that digital assets and blockchain could form part of a new financial architecture for the Global South, not merely serve speculative use cases. The country’s youth-heavy population, about 70% under age 30, was central to his view that it could take a leading position in crypto adoption. Chainalysis’ 2025 index placed Pakistan third worldwide, pointing to how policymakers in emerging markets are increasingly factoring digital assets into long-term economic strategies.