Overseas Exchanges Court Korea's Low-Volume Coin Markets
Foreign exchanges are turning their attention to Korea's low-volume coin markets as they seek market access. With limited room to invest in won-based exchanges, overseas operators such as Coinbase and Chinese-linked exchanges Bitget and Bybit are eyeing domestic coin-market exchanges for potential acquisitions or investments.
Coin-market exchanges, which allow users to buy and sell cryptocurrencies with Bitcoin or stablecoins but do not support won-based trading, have secured Virtual Asset Service Provider (VASP) registration after review by financial regulators. This gives them an entry route into Korea, saving time and cost compared to a new entrant going through the registration process from scratch.
According to industry sources, Coinbase has been reviewing possible equity investments in Korbit and Bithumb, but has more recently been examining coin-market exchanges as well. Chinese-linked exchanges Bitget and Bybit have shown steady interest in the Korean market, with one head of a coin-market exchange stating that they are 'sounding out several domestic exchanges'.
Coin-market exchanges are rushing to prepare for the VASP re-registration process, which begins this month and requires existing VASPs to re-register by November 20 under tighter standards. One exchange aims to submit its filing on the first day the rules take effect and to have it accepted in November or December.
The industry estimates that only three or four of the coin-market exchanges have the foundations needed for acquisition, such as anti-money-laundering (AML) systems and specialized staff. Analysts say competition to acquire these operators could intensify late in the year, when it becomes clear which operators have passed re-registration.