Korea

ApeCoin surges 1,950% on South Korean crypto exchange Upbit

The APE/BTC trading pair reached an all-time high of around $90 apiece on the exchange.

On April 12, Yuga Labs’ ERC-20 token ApeCoin (APE) briefly surged to $90.00 from around $4.20 apiece on the South Korean cryptocurrency exchange Upbit before most gains were wiped out in a sharp sell-off. However, the token is still trading at $10.90 apiece at the time of publication, representing a significant premium of around $4.50 compared to other exchanges.

Currently, the only APE trading pair listed on Upbit is BTC/APE; it represents only a tiny portion of the coin’s trading volume, with around 4 million tokens changing hands during the day compared to APE’s overall circulation of 369 million tokens. It appears the spike was attributed to an overall retail frenzy and constriction of available trading routes on the exchange. On the same day, Upbit suspended the deposits and withdrawals of Ether (ETH) and ERC-20 tokens, pending the completion of the Ethereum network’s Shanghai upgrade.

As a result, APE, an ERC-20 token regarded by some as a memecoin, could not be sold nor purchased into other ERC-20 tokens such as Tether (USDT) and ETH by Upbit’s users, leaving the Bitcoin (BTC)-to-APE (BTC/USD) trading pair the only available option. Since the rally, crypto price aggregators such as CoinMarketCap have flagged Upbit’s APE pricing as an “outlier” when computing aggregate prices.

Cointelegraph reported last year that Upbit had achieved a near monopoly in South Korea’s crypto exchange landscape, with total assets of $8 billion and 80% of the domestic trading volume. However, authorities are reportedly considering regulatory restrictions to tame the size of the firm’s operations.

Magazine: South Korea’s unique and amazing crypto universe

South Korea’s Kimchi premium turns to discount

The “Kimchi premium” has flipped to discount again, and that could be saying something about crypto market sentiment, at least in South Korea.

South Korea’s “Kimchi premium” has flipped to a discount again, meaning cryptocurrencies such as Bitcoin are now cheaper to buy on South Korean exchanges.

The phenomenon is named after the Korean dish kimchi. The Kimchi premium refers to when the price of Bitcoin (BTC) trades higher on South Korean exchanges than in other markets.

According to data from blockchain analytics provider CryptoQuant, the Korea Premium index has been shifting between the -0.24 and 0.01 range between Feb.17 and 19.

*The Korea Premium index has been shifting between the -0.24 and 0.01 range between Feb.17 and 19. Source: CryptoQuant*

At time of writing, CoinMarketCap showed BTC trading at $24,464 on Coinbase and $24,487 on Binance.

In comparison, Korean exchange Bithumb had it listed at $24,386, while one of the largest exchanges in South Korea, Upbit, was trading Bitcoin for $24,405.

It’s the same situation for the second-largest crypto by market cap, Ether (ETH).

At time of writing, data on CoinMarketCap showed ETH trading for $1,687 on Coinbase and $1,691 on Binance — but ETH was changing hands for $1,682 on Bithumb and $1,683 on Upbit.

According to Doo Wan Nam, chief operating officer of node validator and venture capital fund Stablenode, the Kimchi premium changing to a discount marks a drop in interest from Korean retail investors.

“Generally it means fall in interest in crypto from Korean retail, which ironically is generally a better time to buy cause you know you can always sell yours to Korean gamblers for 20% premium later when they FOMO,” he said.

Korean (Kimchi) Premium is now turned into Korean Discount

Generally it means fall in interest in crypto from Korean retail, which ironically is generally a better time to buy cause you know you can always sell yours to Korean gamblers for 20% premium later when they FOMO pic.twitter.com/FFcvdi93PE

— Doo | StableLab @Seoul (@DooWanNam) February 19, 2023

Some traders try to profit by trading the price differences between various exchanges, a practice known as arbitrage.

In the past, the size of the Kimchi premium has been tied to news, with notable dips recorded at times when bad news breaks about South Korean crypto exchanges.

The premium disappeared in early 2018 when the South Korean government announced it was planning to crack down on cryptocurrency trading.

A 2019 paper from the University of Calgary found that the Kimchi Premium first occurred in 2016.

According to the researchers, between January 2016 and February 2018, South Korean Bitcoin exchanges charged an average of 4.73% more than their United States counterparts.

Bithumb owner arrested in South Korea over alleged embezzlement

The net is closing in on Bithumb executives as the suspected real owner of the exchange is arrested.

The suspected real owner of South Korea’s largest crypto exchange, Bithumb, has been arrested on embezzlement charges.

According to local media reports, Kang Jong-hyun was arrested on Feb. 2 over the embezzlement allegations. The Seoul Southern District Court issued an arrest warrant for the businessman on Jan. 25 with multiple charges, including dereliction of duty, market manipulation and fraudulent transactions.

The 41-year-old is the elder brother of Kang Ji-yeon, the head of Bithumb affiliate Inbiogen. The firm holds the largest share in Vidente Vidente, which is the biggest shareholder of Bithumb with a 34.2% stake.

According to prosecutors, the brothers colluded to embezzle corporate funds and manipulate stock prices of Inbiogen and video production firm Bucket Studio through the issuance of convertible bonds.

In a notice on the Bucket Studio website, CEO Kang Ji-yeon apologized to shareholders and said the claims against his brother were “unconfirmed,” adding that he will cooperate with the authorities in the investigation.

*One of the few public photos of Kang Jong-Hyun. Source: Korea Post English*

On Jan. 10, Cointelegraph reported that the South Korean National Tax Service agency launched an investigation into South Korea’s largest crypto exchange. Investigators reportedly raided Bithumb’s Seoul headquarters as a part of the ongoing tax probe.

The saga goes even deeper, as Bithumb’s largest shareholder, Park Mo, was found dead in front of his own home in late December.

He was also subject to an investigation amid allegations of embezzlement and market manipulation. It was suspected that Park Mo took his own life due to the charges brought against him.

Bithumb has a 24-hour trading volume of $370 million, according to CoinGecko. Established in 2014, the exchange offers 191 coins and 287 trading pairs, with BTC/KRW the most popular.

Korean financial watchdog to block tens of unregistered exchange websites

Korea’s Financial Intelligence Unit is cracking down on foreign-based cryptocurrency exchanges that are yet to register with relevant authorities in the country.

Unregistered cryptocurrency exchanges operating in South Korea could see their services grind to a halt as the Korea Financial Intelligence Unit (FIU) takes action against 16 foreign-based firms.

The FIU has notified its investigative authority that 16 virtual asset service providers have been carrying out business without the necessary registrations. Major exchanges, including the likes of KuCoin, Poloniex and Phemex, were listed alongside 13 other exchanges that are set to be hamstrung by the FIU.

All 16 exchanges have purportedly engaged in business activities targeting domestic consumers by offering Korean-language websites, running promotional events targeting Korean consumers and providing credit card payment options for cryptocurrency purchases. These activities all fall under the Financial Transactions Report Act .

The FIU has already taken action against the unregistered exchanges by reporting the violation of registration duties and intends to inform their counterparts in the respective countries wherein the businesses operate. Unregistered entities face five years in prison, a fine of roughly $37,000 and a potential ban on future registration in the country.

A request has also been submitted to the Korea Communications Commission and the Korea Communications Standards Commission to block domestic access to the websites of the exchanges in question.

Credit card service providers have been requested to identify and block cryptocurrency purchases made with credit cards. The FIU has also issued a requirement to registered exchanges in the country to suspend transactions from the 16 unregistered companies in an effort to curb transfers to other platforms.

In July, South Korea’s Financial Services Commission announced a deadline for local and foreign-based, cryptocurrency-related businesses to register with the relevant authorities. Sept. 24 is the due date for companies to register before they are liable to face criminal prosecution and the prospective fines and penalties previously mentioned.

While the FIU takes aim at unregistered exchanges, the FSC has vowed to expedite the review of 13 different bills relating to cryptocurrencies under the consideration of the National Assembly of South Korea. Efforts are being made to produce legislation that has a balanced approach to blockchain development, investor protection and market stability.