Korean crypto platforms strive to turn more reliable with global partner, protection

2021.05.07 13:22:02 | 2021.05.07 13:35:25

Korean cryptocurrency-devoted platforms are going on their own to turn more global and reliable players amid near-zero regulations and state protection that has made the country’s market most vulnerable to predators and bubble burst.

Digital Currency Group (DCG), the parent of CoinDesk that offers bitcoin and digital currency news, has made a strategic investment in Streami Inc., a South Korean blockchain company that operates crypto exchange GOPAX, to become the second-largest shareholder.

“The investment includes an exclusive regional partnership between Streami and Genesis, the industry’s largest digital asset lender and a DCG subsidiary, to offer flexible and fixed-term savings products,” DCG said in a release on Thursday.

The size of the investment was not disclosed.

Lee Jun-haeng, founder and chief executive of Streami, also confirmed the investment, tweeting that it has been “very fortunate to be part of DCG family since 2016” and that it is “very happy to announce that now DCG is GOPAX’s second largest shareholder.”

DCG had previously participated in Streami’s pre-series A investment round in 2016.

The investment comes amid tightening regulation in Korea’s virtual currency sector.

CoinDesk added the investment “suggests DCG is not concerned that GOPAX will be hurt by the country’s move to a stricter regulatory environment.”

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The Korean government last month announced a crackdown on illegal activity involving virtual assets until June.

The largest shareholder of Streami is Lee who owns nearly half of company shares. According to CoinMarketCap, GOPAX has a 24-hour trading volume of about $114.4 million as of 10:48 p.m. Thursday.

Under the revised act on reporting and using specified financial transaction information, local crypto exchange operators must register as a virtual asset service provider by Sept. 24. In order to register under the law, they must have their deposit accounts.

An official from GOPAX said that DCG chose Streami as its strategic investment target eying on the size of Korea’s virtual currency market and GOPAX operations.

The official added that GOPAX will be able to open a deposit account for verification and register before deadline.

Amid zero protection in digital coins that are regarded “intangible asset” by Korean authorities, exchange operators are setting up their own protection schemes and offering consultancy and compensations to victims of scams.

Operator of cryptocurrency exchange Upbit, said on Thursday that it will invest 10 billion won ($8.9 million) to set up a digital asset investor protection center that offer legal consulting services to investors and part of the compensation. It has not yet decided whether to accept only Upbit users or other traders.

By Lee Sae-ha and Lee Eun-joo

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