"All worries about (Upbit) intentionally not allowing the opening of new accounts will be dispelled," said President Lee Seok-woo on September 7th during a press conference, which took place prior to the Upbit Developer Conference. The statement pretty much shows that the exchange will address the two challenges, namely, the overall trade volume drop and new customer attraction limitation, at the same time.
Early this year, Upbit and Bithumb were in a race to become the most traded crypto-exchange amid the global competition of crypto-exchanges around the world. Thanks to huge amounts of fees income, Upbit operator Dunamoo announced in March a three-year investment plan of KRW 100 billion in the blockchain industry. However, just six months after the announcement, Upbit's trade volume rank dropped below the Top 20. It was also raided by the prosecution in May under the allegation of inflating its balance sheets.
Despite such bad events and the continued downward trend in the cryptocurrency market, Upbit held the Upbit Developer Conference 2018 (UDC 2018), a two-day event on September 13th and 14th.
During the press conference Lee pointed to the opening of new accounts as the key task for the second half of the year. "A lot of users question if we are not issuing new accounts intentionally. We will focus on actively working with the Industrial Bank of Korea to enable the opening of new accounts," said Lee.
"Following the previous high at the beginning of the year, the trade volume has been on a continuous decline. We are also trying to figure out a way to mitigate this downward trajectory."
Lee pointed the absence of related market regulation as the most difficult problem. "It is unfortunate and somewhat ironic that foreign companies are actively doing business in Korea, while the government is breathing down locals’ neck," commented Lee, adding, "It feels that there is always some sort of reverse discrimination against the domestic companies, which in turn work in favor for the foreign companies."
According to Lee, member exchange desks of the Korea Blockchain Association are blacklisted by banks, and thus are experiencing difficulties in remittances. "Even if you want to invest in a foreign company or make inroads to the overseas market, money transfer is prohibited. Banks claim that they can become subject to the Financial Supervisory Service’s audits. In a nutshell, exchange desks that joined the Association to do good are actually the ones experiencing hardships," explained Lee.
"The government seems to view the crypto-market as a highly ‘speculative market’ due to the soaring bitcoin price since last year," said Lee with regards to the domestic regulation, emphasizing, "More people need to understand that blockchain and bitcoin are inseparable concepts, and institutions should be formed to suit positive future potentials."
"The central government should provide cooperative support to address government-wide initiatives such as the KYC (Know Your Customer) system or anti-money laundering," said Lee with regards to the local governments' movement to create a blockchain special zone. "Both the action of the local governments (to plan the special zone) and the role setting of the central government are needed," he said.
Lee also shared his opinion on the current inundation of crypto-exchanges. "Exchange desks give more liquidity to tokens and introduce them to investors. However, it is regrettable to see indiscriminate establishment of exchanges with aims to simply make money rather than to help members access good tokens. The formulation of a standard is urgently needed to protect both the investors and customers."
"We have already invested about KRW 20 billion this year, keeping up with our three-year investment plan announcement of KRW 100 billion. The ecosystem requires lots of good opportunities and active investments in order to grow."
"We regard Upbit as a financial investment company. We ultimately want to become a platform that manages various assets for customers in a comprehensive manner," he said.
Translated by Cha Soo-jin