Bithumb, a South Korean cryptocurrency exchange, is working on an NFT marketplace with a major corporation, which is presumed to be LG CNS, an LG Corporation subsidiary.
In a Jan. 13 interview, Bithumb CEO Heo Baek-young stated that the exchange was working on a nonfungible token (NFT) exchange, which would help it compete with other Korean exchanges such as Korbit and Upbit. Heo said: “An NFT marketplace will be important in promoting blockchain-based content, which will become a driving force in the future.”
The identity of the content creators or artists who have consented to release material in NFT format for Bithumb has yet to be confirmed. Several South Korean news agencies stated that the NFT marketplace is being built in partnership with LG CN. However, a Bithumb official remarked on Jan. 17 that it is difficult to ascertain whether it is LG CNS and whether it is simply them or a collection of enterprises.
What this would mean
Bithumb’s ability to stay competitive would be aided by the launch of an NFT marketplace. Bithumb is now rated second among Korean exchanges in terms of the trading volume. Despite its recent impressive performance and numbers, Bithumb still trails behind its Upbit, which has a 24-hour trading volume of $1.7 billion as compared to Bithumb’s $730 million. Bithumb still has a lot to do to catch up with the pace and popularity of Upbit amongst Korean
Upbit appears to be miles ahead of other platforms as it already launched its own NFT marketplace in November last year. The launch was done with much fanfare as the exchange secured exclusive NFT content commitments from various K-pop acts, including BTS.
In June 2021, the Korbit crypto exchange, which is controlled by gaming giant Nexon, became the first in South Korea to open an NFT marketplace. Korbit is Korea’s fourth-largest cryptocurrency exchange, with a 24-hour trading volume of around $7 million.
While most foreign NFT traders use OpenSea to mint and trade on-chain, Korean dealers prefer to use centralized platforms. Despite the fact that the Klaytn blockchain was established in South Korea and is one of only three platforms with native OpenSea support, trading volume on the Klaytn blockchain has lagged behind Polygon and Ethereum-based marketplaces.
Regulators to investigate the big four
In recent reports, South Korean authorities are set to begin a deep investigation and examine the anti-money laundering (AML) capabilities of the country’s four largest cryptocurrency exchanges. The excahnges are Korbit, Upbit, Coinone, and Bithumb. The Financial Intelligence Unit (FIU) and Financial Services Commission (FSC) want to know if the trading platforms have properly incorporated anti-money laundering (AML) systems that allow them to share data with one another and with regulators, as well as flag fraudulent activity.
The investigation will also look into the development of customer verification methods (also known as Know-Your-Customer, or KYC), the internal control systems of trading platforms, and the systems in place to inform other parties of potential AML violations.
This move comes as authorities around the world are bent on enforcing stricter regulations on crypto platforms to ensure that it is not a highway for fraudulent activities.