Cryptonews recently reported that the South Korean crypto exchange Bithumb is considering ending its long-term banking partnership with NongHyup Bank in favor of a deal with rival bank Kookmin. The decision follows a series of talks between Bithumb and Kookmin which have reportedly concluded successfully. Bithumb has been partnering with NongHyup since 2018 as part of legal obligations for exchanges to have real-name verified fiat on/off ramp bank accounts to offer fiat-crypto pairings. Although Bithumb has not confirmed the switch yet, media outlets suggest that Bithumb has already submitted the necessary banking documentation for regulatory approval, with the potential KB deal becoming active as early as late September.
The timing of this potential move is interesting given that Bithumb recently announced a deal with NongHyup that allows customers to open crypto wallet-linked bank accounts through its platform. Additionally, Bithumb reported positive financial results for the second quarter of the year, with a substantial increase in operating profits and sales compared to the same period in the previous year. The reported switch to Kookmin is seen as part of a new strategy to target younger customers, particularly within the 20-49 age range. This demographic, which comprises a large portion of bank customers in South Korea, includes a significant number of young people interested in cryptocurrencies.
Bithumb’s move to potentially partner with Kookmin is not an isolated incident among South Korean exchanges. Earlier in the week, another Bithumb rival, GOPAX, secured a last-minute contract with its long-term partner Joenbuk Bank, while also awaiting approval for a takeover bid involving cloud provider Megazone. Bithumb’s main competitor, Upbit, currently dominates the South Korean crypto exchange market with almost 65% market share. An unnamed crypto industry official familiar with the situation mentioned that Bithumb and KB have successfully negotiated a deal, with a focus on attracting younger customers. The source suggested that this move signals the intent to compete with Upbit for market share in the future.
Upbit’s success has been partly attributed to its partnership with neobank K Bank, which has made opening accounts and conducting transactions more accessible for users. KB has also made significant strides recently by securing a deal with Samsung’s financial arm, which will involve providing banking services to Samsung’s financial platform app Monimo. This partnership is expected to benefit KB by attracting Samsung’s premium customers in exchange for services that Samsung Financial Group does not currently offer. Overall, the potential switch to Kookmin represents a strategic move for Bithumb to expand its customer base and compete with industry leaders like Upbit in the South Korean market.
