Coinone, South Korea’s third-largest cryptocurrency alternate, has denied reviews that it’s in talks to promote a stake to Coinbase, throwing chilly water on hypothesis that the US alternate large is making a recent push into Korea’s liquidity-rich market.
The denial underscores how tough it stays for international exchanges to crack Korea’s tightly regulated crypto sector, whilst home gamers bear fast consolidation.
Sponsored
Sponsored
‘Utterly Groundless’
The rebuttal got here after Seoul Financial Day by day reported on Jan. 25 that Coinone Chairman Cha Myung-hoon was exploring a partial stake sale, with Coinbase recognized as a possible purchaser. The report famous that Coinbase executives had been scheduled to go to Korea this week to satisfy with main native gamers, together with Coinone.
“The circulating reviews a couple of stake sale are utterly groundless,” a Coinone spokesperson informed native media. “Whereas it’s true that we now have obtained numerous collaboration proposals from abroad exchanges and home corporations, we’re merely involved with a number of events as a part of reviewing enterprise growth potentialities. Deciphering this as a stake sale is inconsistent with the details.”
The corporate added that whereas it stays open to partnerships with abroad exchanges and home corporations, no concrete plans or negotiations are at present underway.
Market Response
Regardless of the denial, markets moved sharply on the preliminary reviews. Com2uS Holdings, Coinone’s second-largest shareholder with a 38.42% stake, noticed its shares surge by greater than 17% on Monday. The inventory briefly touched 26,300 gained earlier than closing at 23,850 gained.
The sharp response displays broader market consciousness. Korean crypto exchanges have turn out to be engaging acquisition targets amid an industry-wide consolidation wave.
Sponsored
Sponsored
Regulatory Stress Looms
The timing of the stake sale hypothesis is notable given Korea’s evolving regulatory panorama. The Monetary Companies Fee (FSC) has really helpful capping main shareholder stakes at 15-20% as a part of the nation’s second-phase digital asset laws, citing issues over concentrated possession at exchanges serving 11 million customers.
Chairman Cha at present holds 53.44% of Coinone by his private stake (19.14%) and holding firm The One Group (34.30%). Ought to such laws take impact, he could be required to considerably cut back his possession no matter any Coinbase involvement.
Nevertheless, the ruling Democratic Get together selected Jan. 20 to not embrace the stake restriction within the present legislative push, although analysts observe the measure might resurface if market focus points or safety issues escalate.
Consolidation Wave
The Coinone hypothesis comes amid unprecedented restructuring in Korea’s crypto alternate sector. Naver Monetary and Dunamu, the operator of the market chief Upbit, have authorized a merger through a complete inventory swap. Mirae Asset Securities is pursuing an acquisition of the fourth-ranked Korbit. Binance not too long ago obtained remaining regulatory approval to accumulate fifth-ranked Gopax.
Korea’s crypto market stays extremely concentrated, with Upbit and Bithumb collectively commanding over 97% of the market share, in accordance with authorities figures. Coinone trails at roughly 1.5% by official rely, although non-public estimates from CoinGecko counsel its share could have climbed to round 6.6% in January.
For Coinbase, which has lengthy eyed the Korean market as one of many world’s most energetic retail buying and selling hubs, a neighborhood partnership would supply regulatory cowl and established infrastructure. However Coinone’s agency denial suggests any such association stays removed from sure.