Until recently, South Korea’s fever for cryptocurrency trade has been nearly unparalleled. With only about two million traders, the small country of 50 million was one of the largest markets for Bitcoin and Ethereum last summer.
Cha Myunghun, CEO of major crypto exchange Coinone, says the speculative spirit was not healthy for the market — but it certainly helped grow his company from 20 employees in January 2017 to over 100 today. Coinone has risen to the top three cryptocurrency exchanges in Korea, with 643,000 users and reaching 23.4 billion won in monthly revenue last December.
“Coinone has a social responsibility and we want to foster a healthy market without much speculation. So we are educating the investors about the technology and the market,” he says.
Previously, there was no other way to send money abroad cheaply. But Cha admired how blockchain technology enabled this by eliminating the middleman. Bitcoin was the first embodiment of this innovation. Cha, a white-hat hacker and cybersecurity engineer, first realized the massive potential of cryptocurrency and blockchain after reading Bitcoin’s white paper around four years ago and founded Coinone in February 2014 with two engineers.
Coinone has pulled in front of rival exchanges by raising the bar for technological standards and issuing statements on the technological aspects of each coin it lists – the only South Korean exchange to do so, Cha said. The standards are so high that even ICON, a coin listed by an affiliate of its parent company Dayli Financial Group, is not listed on Coinone.
Then came the cryptocurrency boom of mid-2017, when investors young and old took advantage of a largely unregulated market to bank on hot money. Korea became one of the top markets for Ethereum trade, routinely driving prices to 30 or 40% above the global average.
It was only a matter of time until regulators had to take notice for fear of the bubble bursting. In recent months, mixed and often extreme comments from regulators have fueled volatility and uncertainty over whether initial coin offerings and trading would be banned altogether. Cryptocurrency exchanges including Coinone were also raided with regulators seeking to check their ledgers.
While the authorities are still evaluating most regulations, it has implemented some security and identity verification requirements while banning all foreigners from trading with fiat on the exchanges. Cha said he was confident that despite comments, regulators would never go as far as banning cryptocurrency trade, the core service of his company.