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Upbit exchange paid ten times greater fees to South Korean internet bank K bank in the first quarter of 2021 than in the previous quarter.
South Korean banks reported record quantities of deposits and withdrawals to local cryptocurrency exchanges as cryptocurrency marketplaces flourished in the first quarter of 2021.
According to statistics obtained by Democratic Party member Kim Byung-wook from the Financial Supervisory Service, South Korean commercial banks handled 64.2 trillion won ($57.9 billion) in transactions on real-name bank accounts connected to crypto exchanges in Q1 2021.
The Q1 results comprise data from lenders like Shinhan Bank, online bank K Bank, and Korean NH NongHyup Bank, as well as four major local crypto exchanges including Upbit, Bithumb, CoinOne and Korbit, local business publication The Maeil Business Newspaper reports Tuesday.
According to the data, crypto flows on verified bank accounts in South Korea surged over 40% year-over-year from 37 trillion won ($33.4 billion) in Q1 2020.
South Korean banks have also seen a significant surge in cryptocurrency exchange fees, with K bank earning roughly 5 billion won ($4.5 million) in crypto commissions through Upbit exchange in Q1. According to the study, this is over a tenfold rise from 560 million won ($504,000) in Q4 2020.
NH Nonghyup Bank reportedly received 1.3 billion won ($1.2 million) and 330 million won ($297,000) from Bithumb and CoinOne, respectively, in Q1 2021, while Shinhan Bank received 145 million won ($131,000) from Korbit, the data showed.
According to Kim, the “growing speculative fever in crypto markets fueled by market liquidity” has resulted in a significant increase in the number of real-name bank accounts for crypto trading and crypto exchange-derived fees.
“Financial authorities and major commercial banks should roll up their sleeves to protect crypto investors from potential crypto scams and external hacking attacks targeting local coin operators,” added the official.
South Korean financial regulators, as previously reported, require local virtual asset service providers to get verified accounts in their actual names from banks.