OKCoin, once China’s principal digital currency exchange, is broadening its horizons with a strategic decision to expand its territory to South Korea. The move closely shadows that of its largest competitor, Huobi, who announced a similar migration in December 2017 following China’s comprehensive cryptocurrency ban three months prior.
Entertainment Partnership Strengthens Move
According to local media reports on January 19, 2018, OKCoin will utilize a partnership with NHN Entertainment to launch the new leading digital currency exchange in South Korea. The aim of OKCoin appears to be an eclipse of South Korean exchanges UpBit and Bithumb, through its listing of a greater number of cryptocurrencies available for trade. With the bar set at UpBit’s 30 listings, OKCoin will offer twice the amount with a planned launch integration of 60 cryptocurrencies.
Ambitions clear, it is likely that OKCoin will once again dominate its local cryptocurrency exchange market. As the launch is set to take place in the face of local platforms that also includes Coinone, OKCoin has done well to secure the backing of NHN Entertainment. As a fitting partner, it has the local savvy, resources and capital to support a venture that would otherwise not have been possible for OKCoin.
Risk of South Korean Cryptocurrency Exchange Ban
The increase in exchanges looking to South Korea as a center of operations halts rumors of an imminent trading ban by the South Korean government. Commentators doubt that the millions needed for development and meeting compliance stipulations would be spent by either partner in the venture without concrete reassurance that a ban on exchanges is not looming in the distance.
OKCoin President Chris Lee told a local news company that the platform had grown to include one hundred full-time developers on the payroll; the company’s size bearing testament to its long-term vision of becoming an internationally-used exchange. Lee was emphatic that South Korea was a strategically important market to colonize, as it would pave the path towards international expansion. Still, it is not without like-minded competitors.
OKCoin’s old rival Huobi, having infiltrated and established itself in the Hong Kong cryptocurrency market, is set to partner with the Japanese financial powerhouse SBI Holdings to consolidate the Japanese market further while expanding into South Korea. The recent Chinese government’s crackdown on cryptocurrency trading has also spurred other local exchanges to seek greener fields in South Korea and Japan. It has been reliably reported that at least ten more cryptocurrency exchanges will launch in the South Korean marketplace within the next three months.
Measuring Market Barriers
Sentiments felt by both local and international exchanges are confident that the direction government is adopting in South Korea is no impediment to future growth in the market. Moreover, the government has recently taken lengths to assure the marketplace that no cryptocurrency ban is on the cards. Kim Sang-Joo of South Korea’s Fair Trade Commission made the following statement on government regulation:
“[Shutting down cryptocurrency exchanges] is not realistically possible. Based on electronic commerce law, the government does not have the authority to close down cryptocurrency trading platforms.”
Adding to the statement, he said, “From the viewpoint of an economist, it is not a fair and transparent decision to outright ban economic activity. Whether it is excessive speculation or not, the gain or the loss is the responsibility of the investor.”
In spite of recent internal debate, most notably involving Justice Minister Park Sang-ki, the official line from the government is a relatively hands-off approach. This is likely to spur further expansion into the local market by established cryptocurrency exchanges from abroad. With bitcoin and others still beyond bullish and enjoying growth rates unparalleled in other quarters, these exchanges, once established in South Korea, will service the rampant global demand for cryptocurrency and its respective trading options.