TradFi Giant Mirae Asset Buys Ailing Korbit Exchange

While advocates of decentralised networks frequently promote a vision of financial independence, the reality of corporate consolidation paints a very different picture. According to a regulatory disclosure filed on 13 Feb, South Korean financial group Mirae Asset Consulting is purchasing a 92.06% majority stake in the digital asset exchange Korbit.

The firm is paying KRW 133.5bn ($93mn) for 26.9mn shares in the fourth-largest crypto exchange in South Korea by trading volume. The move represents a significant expansion for a traditional financial powerhouse looking to capture the growing demand for digital assets. It comes at a time when regulators in Seoul struggle to update their rulebooks and manage the merging of legacy capital with blockchain infrastructure.

Securing a digital growth engine

In the official filing, the asset management firm stated the acquisition aims to secure future growth engines based on digital assets. The transaction was carefully structured through its consulting arm (a non-financial affiliate of the wider group) to comply with South Korean rules regarding the separation of financial and crypto entities.

Globally, Mirae Asset Financial Group oversees $729.5bn in total assets under management. The sellers of the Korbit shares include NXC Corp (the parent company of gaming giant Nexon) which held a 60.5% stake and SK Planet which owned 31.5% of the exchange.

Deal making across the exchange sector

This acquisition is certainly part of a wider trend. It follows a landmark move in November when the search and payments portal Naver agreed to acquire Dunamu, the operator of the largest South Korean crypto exchange Upbit, via a share-swap deal.

Both transactions are unfolding against a complicated regulatory backdrop. The Financial Services Commission (FSC) has proposed capping the ownership of crypto exchanges by major shareholders to between 15% and 20% under Phase 2 of the DIGITAL ASSET BASIC Act. The passage of this legislation has stalled due to disagreements among regulators regarding several issues, including the specifics of who can legally issue stablecoins.

Operating under regulatory scrutiny

Crypto exchange operations are already facing intense scrutiny following the Bithumb glitch last week, where 620,000 Bitcoin ($43bn) was mistakenly sent to users as a promotional reward.

While the second-largest crypto exchange in the country managed to claw back 99.7% of the funds, the incident (blamed on employee error) raised serious regulatory concerns. The FSC noted that the error exposed vulnerabilities in the internal control systems of virtual asset exchange service providers and subsequently launched an onsite investigation into Bithumb and other local platforms.

Mirae Asset confirmed in its filing that its board approved the Korbit deal on 5 Feb. The transaction is expected to close on the seventh business date following the satisfaction or waiving of all closing conditions.