OKX, Korea Investment Buy into Coinone as Regulatory Risks Ease

OKX Ventures is the investment arm of the global exchange OKX, and KIS is one of the country's largest brokerages. The two will each invest 80bn won ($53mn) for a stake of about 20%, the companies said in a statement carried by local media on 29 May. The investment blends newly issued shares with purchases from existing holders and remains subject to regulatory approval. 

Alongside the 40% stake acquired, Coinone founder and Chief Executive Cha Myung-hoon retains control as the largest single shareholder with about 30%, ahead of game maker Com2uS Holdings, a backer since 2021, at roughly 25%. 

Netero Dai, vice president of OKX Global Markets, said: "The future of finance will be built on compliant, well-regulated infrastructure," and called South Korea one of the world's most mature digital asset markets.

South Korea's won market is dominated by Upbit and Bithumb, which turn over about $943mn and $496mn a day on CoinGecko. Coinone, founded in 2014 and once ranked second worldwide by trading volume in 2017, is a distant third at roughly $42mn, ahead of smaller rivals Korbit and GoPax.

Foreign and local capital

OKX is only the second global exchange to take a major stake in a Korean won-based exchange, after Binance's takeover of GoPax. KIS's move came a day after Samsung Securities, with affiliates Samsung SDS and Samsung Card, agreed to buy a 4% stake in Upbit operator Dunamu for 613bn won ($406mn). 

Both deals show South Korean brokerages racing into digital assets, alongside Mirae Asset's purchase of Korbit and Hana Bank's larger holding in Dunamu. KIS said it aims to build tokenized securities and stablecoin services by pairing its financial reach with Coinone's blockchain capabilities.

Legal overhang clears

Coinone also cleared two regulatory hurdles the same day. The Financial Intelligence Unit (FIU) accepted its virtual asset service provider (VASP) renewal filing, submitted about one year and seven months earlier, making it the third of the five won exchanges to renew after Upbit and Korbit. 

Separately, the Seoul Administrative Court froze a sanction the FIU had imposed on Coinone over alleged anti-money-laundering failures. The 5.2bn won ($3.4mn) fine, combined with a three-month ban on new customers moving crypto in and out, is now suspended while Coinone challenges it, allowing the exchange to keep operating normally for now. Judges said the ban would have cost new clients just as listed firms and professional investors prepare to enter crypto trading. The decision mirrors earlier reprieves granted to Upbit and Bithumb.

Fee model strained

While Coinone now trails the domestic leaders by a wide margin, even those are struggling as a stock-market boom pulls money out of crypto. The benchmark KOSPI has more than tripled over the past year, hitting an all-time high of 8,476 on 23 May. 

First-quarter revenue fell 55% at Dunamu and 58% at Bithumb, which swung to a net loss, regulatory filings show. With fees making up 97.5% and nearly 100% of their respective revenue, earnings move almost entirely with trading volume, leaving little to fall back on when activity slows. 

For Coinone, the new backing offers an opportunity to diversify beyond its fee-reliant model.