In a significant development in the cryptocurrency sector, OKX, a leading global virtual asset exchange, is set to enter the South Korean market through a strategic acquisition. In collaboration with Korea Investment & Securities, OKX aims to acquire around 20% stakes in Coinone, the nation’s third-largest cryptocurrency exchange. This move marks the first major entry of a global exchange into Korea since Binance acquired Goggax in 2022, highlighting a burgeoning interest in the domestic digital asset landscape.
Sources within the virtual asset and investment banking industry indicate that the acquisition will be executed through the issuance of both new shares and existing shares held by Coinone’s CEO Cha Myung-hoon and his private investment entity, The One Group. Following this transaction, CEO Cha’s ownership stake, previously at 53.44%, is anticipated to drop to a range in the low 30%, adjusting the landscape of major shareholders at Coinone.
Coinone’s shareholder structure reveals that The One Group holds 34.3%, followed by Com2us Holdings with 21.95%, and Com2us Plus with 16.47%. While CEO Cha will still be the largest individual shareholder, this transaction signals a shift in the governance structure, as he moves from a majority stake.
Despite the changes, Coinone reassures stakeholders that it will maintain a responsible management system with Cha continuing to serve as both CEO and the principal shareholder. However, Coinone has indicated that discussions with prospective partners are ongoing, and no definitive agreements have been reached.
The recent valuation of Coinone has been reported at a minimum of 200 billion won, attributed to the limited number of virtual asset service provider (VASP) licenses available in South Korea. This scarcity has garnered significant attention from global investors. With more than 120 million users worldwide, OKX’s acquisition could boost Coinone’s technological capabilities and market liquidity, enhancing its competitive edge in the region.
The urgency for such acquisitions stems from increasingly stringent regulatory requirements governing the cryptocurrency market in South Korea. Under the Specific Financial Information Act, obtaining a VASP license is essential for operating virtual asset-related businesses. Given the difficulties in acquiring new licenses, firms like Korea Investment & Securities are pivoting towards purchasing existing license holders.
Meantime, the evolving regulatory landscape could impose further limitations on ownership structures within virtual asset exchanges in South Korea. Recent proposals indicate that individual shareholders may be restricted to holding less than 20%, with corporate owners allowed up to 34%. This impending regulatory shift creates a sense of urgency for stakeholders to reorganize their equity before implementation.
The imminent requirements, such as the introduction of a mandatory five-minute balance metabolism system to prevent liquidity issues, underscore the importance of advanced technological integration. OKX’s experience, bolstered by a decade of operational expertise in matching technology and risk systems, positions it as a strong asset in navigating these new regulations.
In summary, the impending acquisition by OKX and Korea Investment & Securities represents a pivotal moment for Coinone and the South Korean cryptocurrency market. This deal, driven by regulatory shifts and the quest for technological advancement, underscores the intense competition and evolving dynamics at play within the global digital finance ecosystem. As both companies navigate this transformation, they are poised to set new standards for virtual asset exchanges in the region.
