On February 4, South Korea’s Fair Trade Commission (KFTC) launched an on-site probe into Bithumb over claims that it offers the highest liquidity among domestic crypto exchanges. The KFTC will assess whether Bithumb’s advertising was misleading, given that Upbit had the largest market share.
The Chosun Daily reported that last year, Bithumb used press releases to advertise that it had “the highest liquidity among domestic virtual asset exchanges.” Following these claims, the news outlet noted that the KFTC is reportedly investigating the objectivity of these claims. It sent investigators to Bithumb’s headquarters in Gangnam-gu, Seoul, to obtain pertinent documents, such as the exchange’s ads and promotional materials.
KFTC investigates Bithumb over misleading liquidity claims
Given the current market conditions, Upbit has the largest market share. Following this perspective, KFTC believes Bithumb’s advertisement was overstated and deceptive.
In support of KFTC’s argument, Upbit handled over $180.7 billion in trades in the fourth quarter of 2025, accounting for 65% of the market. On the other hand, Bithumb handled about $86.5 billion, or 31.1%.
Together, Upbit and Bithumb accounted for over 96% of domestic trading activity in Korea’s extremely concentrated cryptocurrency exchange market in 2025. Smaller competitors such as Coinane, Korbit, and Gopax accounted for less than 4% of the market.
This overwhelming market concentration fueled pricing distortions in the SK crypto market, most notably the so-called “Kimchi Premium,” the price gap between cryptocurrencies traded on Korean exchanges and those on global markets.
The “Kimchi Premium” rose to almost 12% in early 2025 amid market turbulence and increased retail speculation, according to Ju.com. It had all but vanished by the end of the year. as a result of tighter government regulation and declining Bitcoin prices that discouraged speculative trading,
Regulatory deadlock over stablecoin raises market uncertainty in SK
The scrutiny of Bithumb’s marketing practices comes at a time when South Korea’s broader crypto market is under mounting regulatory pressure, reshaping trading behavior and capital flows. According to the Ju.com platform, disagreements among legislators have created uncertainty that is increasingly affecting where Korean investors choose to trade, even if local markets are still strictly regulated.
Ju.com reported that the Financial Services Commission (FSC) and the Bank of Korea (BOK) are at odds about who should supervise stablecoins. These disagreements began last year, leading to the postponement of Korea’s Digital Asset Basic Act until 2026.
According to a Cryptopolitan report dated January 30, these disagreements between FSC and BOK are now spilling into the legislative arena, adding another layer of uncertainty to South Korea’s digital asset framework. The report noted that lawmakers are increasingly divided over the extent of regulation of stablecoins, particularly as the nation approaches a second phase of virtual asset legislation.
The Democratic Party of South Korea proposed to table the Virtual Asset Phase 2 Act ahead of the Lunar New Year. According to the report, the law would regulate stablecoins and impose restrictions on large shareholders of digital asset exchanges.
Against this backdrop, The Chosun Daily revealed that the Democratic Party has proposed mandating that stablecoin issuers maintain a minimum capital of roughly 5 billion won ($3.46 million) and capping the shareholdings of significant shareholders in cryptocurrency exchanges at 15% to 20%.
Industry players have been concerned with the suggested ownership and capital regulations. Experts argue that strict ownership and capital regulations may deter investment and innovation at a time when international rivals are advancing more quickly. Industry insiders have also warned that prolonged disagreements could further delay the legislation, potentially leaving South Korea’s financial markets behind global trends.
Talks over the structure of a won-pegged stablecoin have already stalled, with Representative Ahn Do-geol of the Digital Assets Task Force noting sharp divisions over whether banks should control 50% plus one share of stablecoin issuers.
