South Korean Crypto Titan Upbit Halts Transactions Above $721 Amidst VASP Disruption

South Korea's major crypto exchange Upbit suspends deposits and withdrawals of digital assets exceeding 1 million won due to changes in service from Ten&Ten, a virtual asset service provider. Ten&Ten's suspension of transaction support and termination of its Travel Rule Solution service, used by Upbit for deposits and withdrawals, is the reason behind the exchange's decision.

South Korean Crypto Giant Upbit Suspends Transactions Exceeding $721 Due to Service Provider Disruption

Seoul, South Korea - Upbit, South Korea's leading cryptocurrency exchange, has announced the suspension of deposits and withdrawals for digital assets valued at over 1 million won (approximately $721). This move follows the discontinuation of services by Ten&Ten, a virtual asset service provider (VASP) that facilitated these transactions.

In a blog post on April 17, Upbit attributed the suspension to Ten&Ten's termination of its Travel Rule Solution service. Ten&Ten's exchange services ceased transaction support on April 15, with the final withdrawal date set for April 22 at 10:00 KST.

"Due to the suspension of Ten&Ten's Travel Rule Solution service, Upbit has no choice but to temporarily suspend the use of its services and terminate the contract with Ten&Ten," the exchange stated.

The suspension affects a wide range of VASPs that allowed for deposits and withdrawals exceeding 1 million won, including Bblock, Gopax, FlatExchange, Aprobit, Prabang, Borabit, BTX, Flybit, Foblegate, Bithumb, Coinone, Korbit, Coredocs, GDAC, Hanbitco, Qbit, Korea Digital Asset Trust (KDAC), and Oasis Exchange.

Upbit, which has the second-largest market share in the global cryptocurrency market after Binance, has reported a significant decline in trading volume since the beginning of April. On March 5, the exchange reached a daily trading volume of almost $15 billion, its highest this year. However, by April 1, that figure had fallen to $3.8 billion.

The suspension of transactions over $721 comes amidst a broader regulatory crackdown on the cryptocurrency industry in South Korea. Financial authorities plan to release new guidelines imposing stricter regulations for token listings on centralized exchanges by the end of April or early May. They will also prohibit listing digital assets with hacking incidents on domestic exchanges until the root cause is fully determined.

Despite these challenges, the South Korean cryptocurrency market remains vibrant. In the first quarter of 2024, the South Korean won (KRW) surpassed the U.S. dollar in crypto trading volume. According to Kaiko data, KRW transactions on centralized exchanges totaled over $456 billion, slightly exceeding USD's cumulative volume of around $455 billion.

In a separate development, Hong Kong's financial regulator has reportedly approved three spot Bitcoin exchange-traded funds (ETFs), which are expected to list on the Hong Kong Stock Exchange in approximately two weeks.