이 기사는 2021년 09월 07일 08시08분 thebell에 표출된 기사입니다

Upbit’s decision to leave a four-party alliance it formed with three other South Korean cryptocurrency exchanges to co-develop solutions for a travel rule system is seen as a move to cement its dominance in the country's crypto exchange market.

Earlier this year, South Korea’s top four exchanges - Upbit, Bithumb, Coinone and Korbit – planned to join forces to develop solutions for travel rule.

However, Upbit abruptly left the joint venture and received real-name bank accounts from the nation’s internet-only lender K bank, becoming the first exchange to complete the business registration obligation required by the financial authorities before the late September deadline.

The remaining three crypto currencies just decided to establish their joint venture at the end of August. They have yet to receive real-name bank accounts from their partner banks. By September 24, local crypto exchanges must register with the nation's anti-money laundering body and disclose their details on risk management. The remaining three exchanges could face a shutdown unless they are registered as virtual asset service providers by the deadline.

Upbit opted out the joint venture in July, citing the move can be seen as collusion by major players.

However, industry sources widely said that Upbit has chosen its own path despite criticism from the market because remaining in the four-party alliance has no advantage for the firm.

Upbit has stronger negotiating power than K bank. The internet-only bank saw a sharp increase in transaction fees from the crypto exchange and many young customers flew into the bank thanks to its strategic partnership with Upbit amid crypto craze.

Upbit is likely to have been convinced that it could receive a real-name account from K bank without the preemptive establishment of a travel rule system. There was little need for the crypto exchange to maintain the alliance.

Meanwhile, there will be no reason for K bank to issue a real-name account to Upbit if Nonghyup Bank does not issue a real-name account under the same conditions.

Upbit is the nation’s largest crypto currency, holding more than 80% of all transactions made in the country. Most of the trading volume can flow into the travel rule system established by Upbit, without the need for cooperation with competitors.

Upbit’s decision to leave the alliance has caused a delay in the remaining three exchanges’ establishment of the system. (Reporting by Sang-woo Sung)