As ownership of South Korea’s won-based cryptocurrency exchanges rapidly shifts to banks and information technology (IT) companies, overseas exchanges seeking domestic entry are turning their attention to “coin market exchanges” that have virtually no trading volume. These foreign players are focused less on trading revenue and more on securing Virtual Asset Service Provider (VASP) registration status — a designation that means they have cleared the threshold set by South Korean financial authorities.
According to financial industry sources on the 10th, Coinbase, the largest U.S. cryptocurrency exchange, along with major Chinese-linked exchanges Bitget and Bybit, are actively exploring acquisition and investment opportunities with multiple domestic coin market exchanges. Coin market exchanges allow users to buy and sell cryptocurrencies using Bitcoin or stablecoins, but unlike won-based exchanges such as Upbit and Bithumb, they cannot process Korean won deposits and withdrawals, leaving them with virtually no active user base.
A representative of one coin market exchange said, “Coinbase previously reviewed the possibility of equity investment in Korbit and Bithumb, and has recently been looking at coin market exchanges as well.” The representative added, “Chinese-linked exchanges such as Bitget and Bybit are also consistently showing interest in the South Korean market.” The representative explained, “This overseas acquisition demand is the underlying reason why operators with almost no trading volume are rushing to complete VASP re-registration despite operating at a loss.”
From a trading volume and customer base perspective alone, coin market exchanges offer almost no investment appeal. However, because they have passed financial authority reviews and secured VASP registration status, they are viewed as key gateways for foreign capital to enter the domestic market. Acquiring an operator that has already cleared the regulatory threshold can significantly reduce both time and cost compared to a new entrant navigating the stringent registration process from the beginning.
For this reason, coin market exchanges are staking everything on preparing for the VASP re-registration process that begins this month. When the revised enforcement decree of the Act on Reporting and Using Specified Financial Transaction Information takes effect on the 20th, existing VASPs must complete re-registration by November 20th under strengthened criteria, including major shareholder eligibility and financial soundness requirements. Failure to pass re-registration will result in loss of operator status.
According to industry sources, one coin market exchange, referred to as Company A, plans to submit its registration documents immediately on the 20th, the first day of implementation, hoping for review completion between November and December. Coin market exchanges, which typically have simpler ownership structures than won-based exchanges, can reduce review risk and accelerate sale discussions with overseas exchanges by completing registration quickly.
Coin market exchanges that have completed the renewal process following expiration of their existing VASP registration validity periods include Foblgate, Flybit, BTX, Prabang, Beeblock, and Bitcmon. Industry observers estimate that only three to four of these possess the practical infrastructure necessary for mergers and acquisitions (M&A), including anti-money laundering (AML) systems and specialized personnel. Analysis suggests that acquisition competition among foreign capital will intensify around year-end, when operators that successfully pass re-registration are finally identified.
Another exchange representative predicted, “Not only overseas exchanges and financial firms, but also commercial banks seeking won-based real-name account partnerships are waiting for registration approval results under the new standards. Discussions on acquisitions, investments, and bank partnerships will likely accelerate simultaneously starting at year-end.”