South Korea’s financial regulator is reportedly reviewing Hana Bank’s planned $668 million purchase of a 6.55% stake in Dunamu, the operator of the largest domestic cryptocurrency exchange, Upbit.
Local outlet iNews24 cited an unnamed Financial Services Commission official to report that regulators are examining whether Hana Bank’s share purchase from Kakao Investment, rather than directly from Dunamu, falls under broader “banking-commerce separation” rules.
The official said Hana’s investment would be assessed under the same standards as a direct stake in the exchange operator.
Hana Financial Group’s banking unit agreed to buy about 2.2 million Dunamu shares from Kakao Investment for 1 trillion won (roughly $668 million) on Friday.
The transaction would make Hana Bank the fourth-largest shareholder of Upbit. Source: DART
South Korea scrutinizes bank ties to crypto firms
South Korea’s crypto market has long operated under a supervisory principle known locally as “banking-commerce separation,” which limits ownership ties between traditional financial institutions and non-financial businesses.
Related: South Korea plans July rules for tokenized securities
Crypto firms such as Dunamu occupy a gray area under the framework because virtual asset operators are not classified as traditional financial institutions.
In the local outlet Maeil Business Newspaper on Monday, a high-ranking FSC official was cited as saying that “banking-commerce separation” constraints on crypto are not explicitly written into current law and instead operate through policy and supervision.
Some restrictions involving bank participation in crypto operate through supervisory policy and regulatory interpretation rather than explicit legislation.
Related: South Korea crypto holdings halve in a year as investors turn to stock market
In April, South Korea’s ruling Democratic Party proposed the Digital Asset Basic Act, a wide-ranging crypto bill that could establish a legal framework for cryptocurrencies, stablecoins and virtual asset service providers.
Broader finance push into South Korea’s crypto market
Hana’s move comes amid a broader push by financial groups into South Korea’s tightly regulated crypto market.
In February, Mirae Asset agreed to buy a 92.06% stake in exchange Korbit via Mirae Asset Consulting for about 133.5 billion won (roughly $93 million), rather than through its securities arm.
On Friday, local media reported that OKX and Korea Investment & Securities are in talks to take roughly 20% stakes each in local exchange Coinone via a new share issuance.
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