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Bithumb’s Struggles: Crypto Banking Integration

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Bithumb’s Struggles: Crypto Banking Integration

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Bithumb Korea, the operator of
South Korea’s second-largest cryptocurrency exchange Bithumb, faces a setback
as it fails to secure a deal with major local lender KB Kookmin Bank for the
issuance of real-name accounts, potentially hindering its efforts to attract
more traders.

Under the Act on Reporting and Using Specified Financial
Transaction Information, virtual asset exchanges in Korea are mandated to
utilize real-name accounts for transactions involving
Korean won through commercial banks. Industry officials confirmed on Friday that KB Kookmin Bank
notified Bithumb last week of its decision not to partner with the crypto
exchange for providing real-name accounts.

Bithumb Korea had aimed to
broaden its user base by forming a new partnership with KB Kookmin Bank, as its
existing contract with NH NongHyup Bank is set to expire on March 24. However,
the negotiations fell through, with reasons for the breakdown undisclosed.

Presently, the top five Korean
cryptocurrency exchanges each have affiliations with commercial banks, but none
are linked with the four major commercial banks, including KB Kookmin, Hana,
Woori, and Shinhan. Upbit is partnered with internet
lender K bank, while Coinone and Gopax are associated with Kakao Bank and
regional lender Jeonbuk Bank, respectively.

NH NongHyup Contract Renewal
Uncertain

The failure to secure a deal with
KB Kookmin Bank could also impact Bithumb’s position in renewing its contract
with NH NongHyup Bank. NH NongHyup Bank had renewed its agreement with Bithumb
Korea every six months for the past five years until March of last year, when
it signed a one-year contract.

Although Bithumb announced in
October that it would waive commissions on crypto trading to compete with
Upbit, the market anticipated the end of this policy due to concerns over
sustainability. Consequently, Bithumb ended the four-month commission-free
campaign on Feb. 5, introducing a 0.04 percent fee for all crypto transactions,
lower than Upbit’s 0.05 percent commission.

Bithumb Korea, the operator of
South Korea’s second-largest cryptocurrency exchange Bithumb, faces a setback
as it fails to secure a deal with major local lender KB Kookmin Bank for the
issuance of real-name accounts, potentially hindering its efforts to attract
more traders.

Under the Act on Reporting and Using Specified Financial
Transaction Information, virtual asset exchanges in Korea are mandated to
utilize real-name accounts for transactions involving
Korean won through commercial banks. Industry officials confirmed on Friday that KB Kookmin Bank
notified Bithumb last week of its decision not to partner with the crypto
exchange for providing real-name accounts.

Bithumb Korea had aimed to
broaden its user base by forming a new partnership with KB Kookmin Bank, as its
existing contract with NH NongHyup Bank is set to expire on March 24. However,
the negotiations fell through, with reasons for the breakdown undisclosed.

Presently, the top five Korean
cryptocurrency exchanges each have affiliations with commercial banks, but none
are linked with the four major commercial banks, including KB Kookmin, Hana,
Woori, and Shinhan. Upbit is partnered with internet
lender K bank, while Coinone and Gopax are associated with Kakao Bank and
regional lender Jeonbuk Bank, respectively.

NH NongHyup Contract Renewal
Uncertain

The failure to secure a deal with
KB Kookmin Bank could also impact Bithumb’s position in renewing its contract
with NH NongHyup Bank. NH NongHyup Bank had renewed its agreement with Bithumb
Korea every six months for the past five years until March of last year, when
it signed a one-year contract.

Although Bithumb announced in
October that it would waive commissions on crypto trading to compete with
Upbit, the market anticipated the end of this policy due to concerns over
sustainability. Consequently, Bithumb ended the four-month commission-free
campaign on Feb. 5, introducing a 0.04 percent fee for all crypto transactions,
lower than Upbit’s 0.05 percent commission.



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