Following the cryptocurrency crackdown in China shutting down all crypto exchanges and ICOs, Chinese investors have turned to the Korean market for opportunities in the cryptocurrency space leading to concerns in Korea that their local crypto-trading industry may become dominated by Chinese investors.
Multiple Chinese-funded exchanges like Zeniex, OK Coin, and Gate.io have found a home in Korea following the harsh restrictions set out by the Chinese government. Zeniex, an exchange which received investment from China’s largest internet security company Qihoo 360 and is connected to Bishije and Jinse Chaijing crypto/blockchain media outlets, is now based in Korea. The 18th largest exchange in the world, Gate.io, is a Chinese exchange that also started operations in Korea this month, as well as OK Coin entering the market last month.
Crypto-trading and awareness in Korea is booming and the country does not have strict regulations regarding the establishment of cryptocurrency exchanges at this time, making it an appealing option for Chinese business looking for regulatory havens close to home.
Where China’s ban is firmly in place, South Korea’s National Assembly proposed yesterday that the nation’s ban on ICOs be lifted, and regulators are taking a soft approach with talks of classing cryptocurrencies as financial assets. The Korean influence on the crypto-market is so great that when the nation’s largest exchange Upbit was investigated for fraud earlier this year the market saw a significant decline in value.
As the influx of Chinese funding continues to grow, experts are concerned that the digital currency market in Korea will be entirely controlled by Chinese exchanges unless regulations are put in place to curb the mass exodus of foreign companies.
“Chinese virtual currency exchanges are not yet competitive, but they are key players in the global market,” said an official in the local cryptocurrency industry. “If the Korean virtual money market moves into the system and Chinese exchanges receive real name accounts in the future, the Chinese exchanges will become a big threat to Korean exchanges.”
Featured image from Shutterstock.
Last modified: May 20, 2020 8:44 PM UTC