Korea’s cryptocurrency industry is poised for significant growth as the global crypto landscape undergoes major shifts, with Chinese crypto exchanges faltering and the world’s largest exchange, Binance, facing legal challenges in the US, the Korea Times reported.
In a recent development, Binance was ordered by the US government to pay approximately $4 billion in settlements. The allegations against the exchange include trades violating U.S. sanctions. This turmoil led to the stepping down of its CEO, Changpeng Zhao. Additionally, another crypto exchange, HTX, faced security risks following a hacking incident, adding to the industry’s uncertainties.
Amidst this upheaval, a remarkable $1 billion worth of virtual assets were withdrawn from Binance in a single day, reflecting growing market nervousness.
Greta Yuan, head of research at VDX, a Hong Kong-based digital-asset platform, notes, “In the short term, we’re likely to see a shift towards compliant or licensed exchanges as users seek more security.”
Korea, which is still rebounding from the recent “crypto winter,” finds itself in a favorable position to capitalize on these global market changes. The country’s crypto industry has shown resilience, with a significant increase in global market capitalization of virtual assets this year.
Industry experts anticipate that the fall of Binance will indirectly benefit exchanges in other countries, including Korea. “There’s a strong possibility that users may turn to alternative markets in Asia,” stated a crypto industry official interviewed by the Korea Times.
The anticipated approval of a Bitcoin spot-exchange-traded fund (ETF) is also expected to bolster the industry.
Korea’s proactive approach in forming cryptocurrency regulations has been commended by international industry leaders. Mike Belshe, CEO of Bitgo, highlighted the Korean financial authorities’ keen interest in ensuring the proper functioning of the crypto industry.
During his visit to Korean Blockchain Week 2023 in September, Belshe announced plans for Bitgo to enter the Korean market in partnership with Hana Bank, citing Korea’s prominent position in Bitcoin trading and its potential as a crypto hub in Asia.