[Why&Next] Mirae Asset and Korbit Merger Approved... Will a Unified Platform for Stocks, Bonds, and Coins Emerge?

Fair Trade Commission: "Lower Likelihood of Competitive Restrictions in Securities and Asset Management Markets"

Principle of Separation of Finance and Commerce Also Eased... Welcome News for the Virtual Asset Industry

Many Hurdles Remain fo

The Fair Trade Commission has approved the business combination between Mirae Asset Financial Group and the virtual asset exchange Korbit. The commission determined that even if the two firms merge, there is little likelihood of restricting market competition. For stakeholders in the virtual asset industry, this is expected to be welcome news, as it helps resolve various pending issues.

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Fair Trade Commission: "Korbit unlikely to secure significant liquidity even after combining with Mirae Asset"

On July 9, the Fair Trade Commission approved Mirae Asset Consulting’s acquisition of shares in Korbit. Although Mirae Asset Consulting is a non-financial affiliate, the commission regarded the acquisition as Mirae Asset Group itself acquiring Korbit. The commission’s review focused on whether the combination of a securities business (Mirae Asset Securities) and a virtual asset exchange could create entry barriers or exclude other competitors in the securities market, especially if a single platform integrating a listed stock investment platform and a virtual asset exchange is launched. For the asset management sector (Mirae Asset Global Investments), the analysis centered on whether the launch of virtual asset-based exchange traded funds (ETFs) could lead to exclusion of competitors.

The commission pointed out that Korbit holds a market share of only 0.5% based on virtual asset trading volume, concluding that the likelihood of restricting competition in both markets is low. The domestic virtual asset market, according to the commission, is dominated by retail investors who tend to prioritize liquidity over fees. Here, liquidity refers to the trading volume of the virtual asset exchange. Higher liquidity means a smaller gap between bid and ask prices, making it easier to execute trades.

For competitors in the securities and asset management markets to be excluded, Korbit’s exchange must secure sufficient liquidity. However, given the current level of liquidity, the commission judged that even if Mirae Asset acquires Korbit, it is unlikely to have a competitive restriction effect.

Korbit Gains a Financially Strong Major Shareholder... Mirae Asset Moves Closer to a "Super App"

With a financially strong major shareholder, Korbit is expected to see its financial burdens reduced compared to before. Since turning to a deficit in 2018, Korbit has posted operating losses for eight consecutive years up to last year. In addition, as the virtual asset market has stagnated, its largest revenue source—trading fees—has declined, and the burden of fixed costs has increased, prompting the company to liquidate assets to reduce expenses. Korbit announced that from July 3 to 31, it will sell 15 bitcoins and 60 ether on Bithumb and Upbit. This is the third such sale this year, and the stated purpose is to cover operating expenses. The total amount sold this year reaches 12 billion won.

Mirae Asset has taken a step closer to launching a unified platform for all financial products. For example, with the introduction of spot virtual asset ETFs, the group will be able to handle issuance, sales, and custody entirely in-house. This means all financial assets could be invested through Mirae Asset. Already, Mirae Asset Securities has released 'MAPS,' a global platform integrating stocks, bonds, and virtual assets, in Hong Kong.

Attention Turns to Bithumb... Many Variables for Naver and Dunamu Merger

This decision by the Fair Trade Commission could spur more active transactions involving exchange shares in various forms. Bithumb, the second-largest player in the industry, is expected to see changes in its shareholder structure. It has been reported that negotiations are already underway behind the scenes, with Kiwoom Securities considering an equity investment. The so-called "separation of finance and commerce" principle, which has acted as a shadow regulation hindering financial firms from entering the virtual asset market, also appears to have been somewhat eased. An industry insider said, "While it cannot be said that the separation of finance and commerce has been completely abolished, it does indicate a shift in the government's policy of 'total prohibition.' As the U.S. regulatory framework is increasingly focused on fostering the virtual asset market, this development is likely to serve as a precedent for Korean regulators as well."

However, a different outcome may be reached in the case of a business combination between Naver Financial and Dunamu (Upbit). The commission may be concerned about platform monopoly. Unlike financial companies, Naver Financial is an electronic financial business operator that does not directly manage customer funds. However, the key issue is whether the combination of Naver Pay as a platform and Upbit, the leading virtual asset exchange in trading volume, could result in the exclusion of competitors if they become a single platform. An industry insider commented, "Both Naver and Dunamu have dominant market shares in their respective markets, so whether this violates the commission’s standards is critical." There are also numerous procedures to go through: in addition to approval by the Fair Trade Commission, Naver Financial’s change of major shareholder and concurrent business notification under the Credit Information Act, and approval of Dunamu’s change of major shareholder under the Specific Financial Transaction Information Act, are all required.

This content was produced with the assistance of AI translation services.