Spot bitcoin ETF approval triggers surge and shift in Korean crypto exchange performances

Dunamu, the operator of South Korea’s largest crypto exchange, Upbit, secured approval to renew its registration as a virtual asset service provider (VASP), ending 16 months of regulatory limbo that had clouded the domestic market.Photo by Daniel Bernard on UnsplashAccording to Newsis, the Financial Intelligence Unit (FIU) under the Financial Services Commission (FSC) granted the approval on Dec. 23. Industry participants view the decision as a stabilizing signal for the sector amid the country’s evolving crypto regulations. Under South Korean law, VASPs must renew their licenses every three years. Dunamu submitted its application by the statutory deadline of Aug. 21, 2024, but the review faced prolonged delays due to FIU staffing shortages and overlapping sanctions proceedings. Regulators had flagged Dunamu for alleged violations regarding customer due diligence and transaction restrictions, resulting in a 35.2 billion won ($24.4 million) fine. Prior to the fine, the FIU issued a disciplinary warning to Dunamu’s chief executive and ordered a three-month partial suspension of operations. Dunamu is currently contesting the suspension and warnings in court, with a fourth hearing scheduled for February 2026. Despite the ongoing litigation, the company stated it has addressed all regulatory issues and implemented measures to prevent recurrence. Market clarity fuels expansion, IPO ambitionsWith uncertainty surrounding the market leader resolved, observers expect other exchanges to feel emboldened to pursue expansion, including new business launches and potential initial public offerings (IPOs). Bithumb, the country’s second-largest exchange, is weighing a public listing as early as next year. Securing license renewal would bolster market confidence and expand the company’s strategic flexibility. Other major platforms, including Coinone, Korbit, and Gopax, filed renewal applications late last year. Each faces sanctions proceedings for alleged legal violations, leaving the market closely watching for FIU rulings. Exchanges recruit ex-regulatorsWith regulatory scrutiny remaining a constant challenge, South Korean exchanges are increasingly recruiting former senior financial regulators to navigate the legal landscape. Citing data from the FSC and the Financial Supervisory Service (FSS), Segye Ilbo reported that the flow of senior officials into the crypto sector has accelerated. Between January and November, eight former FSS officials at Grade 4 or above moved to crypto firms—well above the historical norm of one or two annually. Over the past two years, 16 former FSS officials have moved into the crypto industry, with nine joining Dunamu and seven moving to Bithumb. Industry insiders link the trend to the enforcement of the Virtual Asset User Protection Act in July 2024, which brought the sector under a formal regulatory framework. Exchanges are seeking the expertise of retired regulators to manage legal risk and strengthen government relations, particularly ahead of planned phase-two legislation focused on stablecoins. TradFi enters as systemic risks watchedAs digital assets move within official regulatory boundaries, traditional financial institutions are accelerating their entry into the sector. On Dec. 26, Korea Investment & Securities signed a memorandum of understanding (MOU) with Bithumb to collaborate on asset management services, Yonhap News reported. The partnership aims to combine the brokerage's equities expertise with the exchange's digital asset capabilities to offer tailored products. However, the deepening ties between crypto and traditional finance have drawn the central bank's attention. In a Financial Stability Report released Dec. 23, the Bank of Korea (BOK) noted that the correlation between Bitcoin and the S&P 500 has increased since 2020. The BOK attributed this to the introduction of crypto-related financial products, such as ETFs, and increased participation by institutional investors and publicly listed companies holding crypto. Spillover risks in South Korea remain contained given the limited level of corporate participation, despite the government’s move earlier this year to gradually permit corporate crypto holdings. However, the central bank warned that greater institutional participation enabled by regulatory easing could intensify risk transmission. The report underscored the need for safeguards to insulate Korean equities from crypto-market shocks. 

Woori Bank Joins Forces with Samsung Securities and SK Securities to Pioneer Security Token MarketWoori Bank has recently forged a memorandum of understanding (MOU) with Samsung Securities and SK Securities, aiming to swiftly venture into the security token market in anticipation of the forthcoming institutionalization of security tokens in South Korea, according to local news outlet Dailian.Photo by Anna Evlanova on UnsplashKorea’s regulatory pathway for security tokensIn February, the Financial Services Commission unveiled guidelines for regulating the issuance and distribution of security tokens. This initiative aligns with the South Korean government’s broader goal of driving innovation in digital finance. Following this, the National Assembly conducted a public hearing on the proposed legislation. Additionally, the Financial Supervisory Service organized an informative session discussing the updated application procedure for investment contract securities and the corresponding examination protocols. As a result, the outlines of the regulatory framework are beginning to take on a more defined form.Compliance with regulatory frameworkWoori Bank President Byung-Kyu Cho, Samsung Securities President Chang Seok-hoon, and SK Securities CEO Kim Shin were present at the signing ceremony. During this event, the three financial institutions agreed to embark on their collaborative efforts to explore business models for security tokens in compliance with the regulatory framework. Their aims include constructing the infrastructure for security tokens and validating distributed ledgers, as well as forming Finance 3.0 Partners (F3P), a collaborative consortium dedicated to formulating investor protection measures.Three entities’ individual endeavorsWoori Bank has undertaken extensive preparations to make its foray into the security token market. In an effort to swiftly adapt to the changing legal dynamics surrounding security tokens, the bank has established a dedicated division and is operating a task force responsible for devising strategic approaches, with participation from Woori Financial Group’s affiliates. By partnering closely with the securities firms, Woori aims to leverage its wealth of corporate finance expertise to identify innovative business models.Samsung Securities has successfully concluded its own functional verification of the security token platform. Furthermore, the company has secured the technology necessary to connect blockchain wallets and securities accounts. These efforts will contribute to providing stable services. Samsung is also anticipating the utilization of security tokens as a fresh avenue for financing, collaborating with various enterprises to discover their practical applications. Through these endeavors, the company intends to offer attractive and stable investment products to its clientele.SK Securities stands out as the sole Korean securities firm to have established an account management system for security tokens, with the intention of seeking designation as an innovative financial service by the Financial Services Commission. Initiatives chosen as innovative financial services are granted regulatory exemptions. SK Securities has partnered with a variety of fractional investment firms to spearhead the research and development of security token issuance and distribution systems. It also plans to collaborate with experts in the domains of finance, technology, and content. This joint effort aims to build the infrastructure necessary to create a financial ecosystem that welcomes diverse participants and creates new value.An F3P official highlighted that this tripartite partnership would facilitate the alignment of their members’ security token products with regulatory guidelines. The person also mentioned their commitment to swiftly establishing a top-notch platform and ecosystem that will help position them as market leaders.

Raon Whitehat Enables College Students to Hone Skills Through MetaverseRaon Whitehat, a blockchain-based service provider of South Korean tech security firm RaonSecure, is set to launch Raon Metademy, a cutting-edge metaverse-powered professional training platform, for universities.Inviting beta testersToday, Raon Whitehat announced the successful completion of the beta version of Raon Metademy, developed in collaboration with edtech company Globepoint. The company is now inviting beta testers from university departments and educational institutions to participate.Interested universities can apply on the Raon Metademy website, with beta testing planned until the end of August. During this period, Raon Whitehat will gather valuable feedback to further enhance the platform. The official launch is scheduled for September 1 to support university classes.Effective remote practicesRaon Metademy boasts a metaverse-based training approach, offering users access to a virtual campus where they can attend lectures and practice essential skills. The platform’s highly immersive user experience allows students to create personalized avatars, explore the campus, access announcements, have a look at training courses, and utilize the training room. With vivid 3D visuals and realistic video-based exercises, students can effectively practice their skills from remote locations.Additionally, users can set up private labs to address their weaknesses, engage in discussions, and build a community similar to a physical campus environment. Among the confirmed beta testers are Chung-Ang University and Seoul Women’s University, and the application window for other institutions will remain open until mid-August. The initial beta service will focus on nursing skills, physical therapy, and security practices, with plans to expand the content to include caregiving practices and more.Photo by Nhia Moua on UnsplashDigital credentials and NFTsRaon Metademy aims to provide certificates of completion and awards of excellence in the form of digital badges, simplifying the process of submitting credentials to universities and other organizations. The platform will also introduce non-fungible tokens (NFTs) to benefit content providers, facilitating secure trading of educational materials among students.Leveraging RaonSecure’s cutting-edge technologies, including blockchain and NFTs, Raon Metademy aims to become a versatile platform open to content providers, educational institutions, and individuals alike. This will enable students to access a diverse range of captivating lessons from anywhere and give lecturers the ability to earn income by delivering high-quality hands-on training with minimal equipment and material costs.