As cryptocurrency markets grew in the first quarter of 2021, South Korean banks saw record volumes of deposits and withdrawals to local crypto exchanges.
South Korean commercial banks processed 64.2 trillion won ($57.9 billion) of transactions on real-name bank accounts linked to crypto exchanges in Q1 2021, according to data from Financial Supervisory Service acquired by Democratic Party member Kim Byung-wook.
The Q1 results comprise data from lenders like Shinhan Bank, online bank K Bank, and Korean NH NongHyup Bank, as well as four major local crypto exchanges including Upbit, Bithumb, CoinOne and Korbit, local business publication The Maeil Business Newspaper reports Tuesday.
According to the data, crypto flows on verified bank accounts in South Korea surged over 40% year-over-year from 37 trillion won ($33.4 billion) in Q1 2020.
South Korean banks have also recorded a major increase in fees paid by crypto exchanges, with K bank receiving nearly 5 billion ($4.5 million) won in crypto commissions from Upbit exchange in Q1. This is almost a tenfold increase from 560 million won ($504,000) in Q4 2020, the report notes.
NH Nonghyup Bank reportedly received 1.3 billion won ($1.2 million) and 330 million won ($297,000) from Bithumb and CoinOne, respectively, in Q1 2021, while Shinhan Bank received 145 million won ($131,000) from Korbit, the data showed.
Kim said that the “growing speculative fever in crypto markets fueled by market liquidity” led to the marked increase in the number of real-name bank accounts for crypto trading and crypto exchange-derived fees.
“The financial authorities and major commercial banks should roll up their sleeves to protect crypto investors from possible crypto scams and external hacking attacks targeting local coin operators,” the official said.
As previously reported, South Korean financial regulators require local virtual asset service providers to acquire verifiable accounts in their real names from banks.