Korea ’ s Top Three Exchanges Acquired by TradFi: Is the Korean Crypto Market Being “Co-opted”?
Original Author: @xparadigms
Original Translation: AididiaoJP, Foresight News
In Asia, the role of centralized exchanges (CEXs) differs significantly from that in the West. Retail traders rely more on exchanges rather than managing their assets through non-custodial wallets. This reliance is most extreme in South Korea, where regulations strictly limit fiat on-ramp and off-ramp channels to just five licensed CEXs.
CEX is the Sole Gateway for Korean Users to Enter the Crypto World
Converting Korean Won to cryptocurrency, and back again, must go through a strictly controlled channel: a user’s CEX account must be linked to a real-name verified bank account, and each exchange can only partner with one designated bank.
Since the Financial Services Commission (FSC) implemented the real-name system on January 30, 2018, deposits and withdrawals can only occur between a bank account and an exchange account under the same bank name. Third-party transfers are not allowed, anonymous virtual accounts are prohibited, and foreigners and minors were initially excluded from participation.
All Virtual Asset Service Providers (VASPs) must first register with the Korea Financial Intelligence Unit (KoFIU) to operate in South Korea. Registration itself requires obtaining the ISMS information security certification from the Korea Internet & Security Agency (KISA) and establishing a complete Anti-Money Laundering (AML) system. However, even passing this hurdle only allows for crypto-to-crypto trading.
To open the Korean Won market, an exchange must also secure a “real-name bank partnership contract.” Banks bear the compliance risk for these contracts, making them extremely cautious in issuing them. Consequently, the vast majority of registered VASPs still can only offer crypto-to-crypto trading. Ultimately, only five exchanges have crossed both the “VASP registration” and “real-name bank contract” thresholds, enabling them to provide fiat-to-cryptocurrency exchange services. Each exchange is locked into a single partner bank.
Traditional Finance is Investing in CEXs at the Cyclical Bottom
For years, Korean crypto exchanges and traditional financial institutions occupied separate worlds, divided by the regulatory principle of “separation of finance and crypto” (금가분리). Although not fully codified into law, this principle was strictly enforced by financial authorities, effectively barring banks and securities firms from engaging in crypto businesses.
In 2026, this line began to blur. Within approximately four months, three of South Korea’s top four exchanges introduced significant traditional financial shareholders.
Now, exchanges are no longer seen merely as trading fee machines but as customer gateways and liquidity venues for the next phase of Korean finance—including Korean Won stablecoins, custodial services, and RWA products. For banks or brokerages, direct equity purchases are the fastest way to acquire VASP licenses, an existing user base, and deep Korean Won liquidity, positioning themselves ahead of the full implementation of the Digital Asset Basic Act (DABA).
This race is also a race against time. The Financial Supervisory Service (FSS) under DABA is expected to cap a single major shareholder’s ownership in a crypto exchange at 20% (an agreement was reached on March 3, 2026). Two major transactions have occurred in the past four months, and the key event to watch in the second half of the year is whether the merger between Upbit and Naver Financial can ultimately be completed.
Case 1: Korbit and Mirae Asset, The First Movers (Feb 2026)
Mirae Asset, South Korea’s largest securities firm, acquired a 92.06% stake in Korbit for approximately $92 million, buying out shares from NXC and SK Square, and announced it would continue to acquire another 5.42%, ultimately holding a 97.15% stake. Korbit holds only about a 1% market share, making this deal more a bet on its license, custodial capabilities, and operational experience rather than trading volume.
Case 2: Upbit and Hana Financial, The Largest and Most Symbolic Transaction (May 2026)
Hana Financial Group agreed to purchase a 6.55% stake in Dunamu (Upbit’s operating entity) from Kakao Investment for approximately $667 million. This is the first major equity transaction between a traditional Korean banking group and a digital asset company.
Case 3: Coinone, OKX Ventures & Korea Investment & Securities (May 2026)
OKX Ventures and Korea Investment & Securities (KIS) each invested approximately $53 million to jointly acquire a 19.6% stake in Coinone, South Korea’s third-largest exchange. The parties deliberately split the shareholding to stay below the anticipated 20% cap, while allowing the CEO to retain management control.
The Crypto Market is Too Big to Ignore
What traditional finance is truly buying isn’t trading fee revenue, but the Korean Won-denominated on-ramp/off-ramp pipeline itself. In a market where only five licensed CEXs can convert Won into cryptocurrency, owning an exchange’s equity is equivalent to owning the conduit connecting Korean retail savings to digital assets.
From this perspective, low trading volumes are almost irrelevant to acquirers—the value of legally protected channels is structural, not cyclical.
Acquisition is also the fastest way to obtain a license. For a bank or securities firm to apply for VASP registration from scratch and secure a real-name bank contract would take years, with absolutely no guarantee that regulators and partner banks would ultimately approve.
Furthermore, the pool of available acquisition targets is shrinking. Korbit has been taken, Coinone is in the process of being acquired, and Upbit and Bithumb are too large, potentially limited to a 20% stake under expected DABA rules. It is foreseeable that valuations for subsequent deals will appear unreasonable based on fee metrics, but perfectly sensible as a strategic option on the Korean Won on-ramp/off-ramp pipeline.
Now, crypto has become too big for traditional financial companies to ignore.
