The Korea Fair Trade Commission (KFTC) has approved Mirae Asset Consulting's acquisition of Korbit, marking the first instance of a financial group subsidiary purchasing a cryptocurrency exchange. This move is expected to contribute to improving the monopolistic structure of the cryptocurrency exchange market, where the top two companies hold a 97% market share.
On July 9, the KFTC determined that the acquisition would not significantly restrict competition in the relevant market and granted approval for the merger. The review focused on Mirae Asset Consulting's acquisition of a 92.06% stake in Korbit for 133.4 billion won. Mirae Asset Consulting primarily generates revenue from its non-financial subsidiary, which operates hotels, while Korbit is the operator of the cryptocurrency exchange of the same name.
The KFTC assessed that the acquisition would result in two mixed mergers and examined whether the integration of Mirae Asset Securities' stock investment platform with Korbit's cryptocurrency exchange could potentially exclude other competitors. The commission also considered whether the launch of an exchange-traded fund (ETF) based on cryptocurrencies might lead to the exclusion of competing businesses.
The KFTC concluded that both mixed mergers posed minimal competition concerns, as Korbit's market share is only 0.5%, making it unlikely to create monopolistic effects. In fact, last year, the market share based on domestic cryptocurrency trading volume showed a duopoly structure, with Upbit holding approximately 69% and Bithumb at 28%.
The lack of liquidity in Korbit was also a factor in the merger approval review. The KFTC noted that Korbit's limited liquidity would not generate significant anti-competitive effects.
The characteristics of the domestic cryptocurrency market were also taken into account. Individual investors in South Korea tend to gravitate toward larger exchanges with narrower bid-ask spreads, making it difficult for Korbit to disrupt the market. Instead, the analysis suggests that the acquisition could aid in improving the monopolistic structure.
This merger is expected to be a significant milestone that could reshape the domestic cryptocurrency market, as one of the five major exchanges has now been integrated into a large financial group.
A KFTC official stated, "This merger is expected to promote the restructuring of the digital financial market and service innovation, ultimately contributing to improving the monopolistic structure of the cryptocurrency exchange market and enhancing competition. We will continue to closely monitor the development of the digital asset market through the convergence of different industries."
On July 9, the KFTC determined that the acquisition would not significantly restrict competition in the relevant market and granted approval for the merger. The review focused on Mirae Asset Consulting's acquisition of a 92.06% stake in Korbit for 133.4 billion won. Mirae Asset Consulting primarily generates revenue from its non-financial subsidiary, which operates hotels, while Korbit is the operator of the cryptocurrency exchange of the same name.
The KFTC assessed that the acquisition would result in two mixed mergers and examined whether the integration of Mirae Asset Securities' stock investment platform with Korbit's cryptocurrency exchange could potentially exclude other competitors. The commission also considered whether the launch of an exchange-traded fund (ETF) based on cryptocurrencies might lead to the exclusion of competing businesses.
The KFTC concluded that both mixed mergers posed minimal competition concerns, as Korbit's market share is only 0.5%, making it unlikely to create monopolistic effects. In fact, last year, the market share based on domestic cryptocurrency trading volume showed a duopoly structure, with Upbit holding approximately 69% and Bithumb at 28%.
The lack of liquidity in Korbit was also a factor in the merger approval review. The KFTC noted that Korbit's limited liquidity would not generate significant anti-competitive effects.
The characteristics of the domestic cryptocurrency market were also taken into account. Individual investors in South Korea tend to gravitate toward larger exchanges with narrower bid-ask spreads, making it difficult for Korbit to disrupt the market. Instead, the analysis suggests that the acquisition could aid in improving the monopolistic structure.
This merger is expected to be a significant milestone that could reshape the domestic cryptocurrency market, as one of the five major exchanges has now been integrated into a large financial group.
A KFTC official stated, "This merger is expected to promote the restructuring of the digital financial market and service innovation, ultimately contributing to improving the monopolistic structure of the cryptocurrency exchange market and enhancing competition. We will continue to closely monitor the development of the digital asset market through the convergence of different industries."
* This article has been translated by AI.
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