Concerns Over Upbit Monopoly... Financial Authorities Standing By

Dunamu Officially Enters NFT Market... Strategic Partnership with HYBE Following JYP
Market Share Over 50% Should Be Considered Dominant Operator

Dunamu, the operator of Upbit, a domestic cryptocurrency exchange, is making a full-scale entry into the non-fungible token (NFT) market, raising concerns about monopolization becoming a reality. Despite these concerns, authorities have not implemented any specific regulatory policies.

According to the industry on the 2nd, HYBE announced on the 26th of last month that it is considering a strategic partnership with Dunamu. Although the specific details have not been disclosed, it is presumed that the partnership will be formed through a stock swap. In July, Dunamu also invested 36.5 billion KRW by purchasing 880,000 shares of JYP Entertainment (JYP Ent.).

The reason Dunamu is actively seeking partnerships with entertainment companies is to make a full-scale entry into the NFT market. NFTs refer to cryptocurrencies that record ownership of digital assets with rarity using blockchain technology. Given the interest in NFTs in the art market this year, the market’s growth potential appears sufficient.

This situation aligns with the interests of entertainment companies. After the ‘With Corona’ phase, which signifies a gradual return to normal life, there is expected to be an explosive increase in demand for celebrity-related products. In this process, entertainment companies showed interest in NFTs, which can easily hold products, and it is interpreted that they pursued a partnership with Upbit, which holds nearly 90% market share in the cryptocurrency market.

However, experts point out that concerns over monopolization will grow further. These concerns have been raised since Upbit’s cryptocurrency business operator registration was approved last September. It is possible to expand business by leveraging its overwhelming market share in the cryptocurrency market. During last month’s National Assembly audit, when lawmakers pointed out Upbit’s monopoly issues, Financial Services Commission Chairman Ko Seung-beom stated that he would review the matter thoroughly.

Nevertheless, authorities remain inactive. The Fair Trade Commission (FTC), which manages monopoly issues, has not made any statements regarding cryptocurrency exchanges. The FTC should determine a single operator with a market share exceeding 50% as a market-dominant business operator. Professor Hong Ki-hoon of Hongik University’s Business Administration Department explained, "The government seems to maintain a stance of not intervening in cryptocurrency issues, and the FTC also appears not to be involved," adding, "Currently, it is a situation where regulation or intervention is sufficiently possible."

There are also calls for additional approvals of cryptocurrency exchanges by financial authorities. Following Upbit, Korbit also received approval as a cryptocurrency business operator, but there has been no related news about Bithumb or Coinone yet. An industry insider said, “If the exchanges are not approved, cryptocurrency investors will flock even more to Upbit,” adding, “This could lead to the adverse effects of monopolization.”

This content was produced with the assistance of AI translation services.