Customers of South Korea’s market-leading crypto exchange Upbit will be affected by a possible three-day outage over the Lunar New Year period as its banking partner K-Bank relocates its operations to a new headquarters.
South Korean banks – and businesses all over the East Asia region – will close their bricks-and-mortar branches over the period, which begins on Monday, January 31, and ends on February 2. Although K-Bank is a neobank and has no physical branches to speak of, officials likely decided that a move over this period would be the least disruptive – although crypto traders might beg to differ. Crypto markets, unlike their conventional cousins, operate 24/7 365 days of the year.
The bank’s services will go offline from January 30 until the end of February 1.
Per Segye Ilbo, K-Bank will move its entire IT center from the Sangam region of Seoul across town to a new location in Mokdong. K-Bank partners Upbit, and provides all fiat on/off ramping services. South Korean law stipulates that all of a crypto exchange’s fiat transactions be made via real name-authenticated bank accounts provided by a single bank – meaning that KRW withdrawals and deposits will likely be off-limits for three days.
In a sense, it appears that Upbit has been a victim of its own success in this regard. K-Bank stated that a huge influx of new customers had necessitated the move. As Upbit has grown to become the domestic market leader in the past 12 months or so, K-Bank has found it hard to keep up with the demand for new accounts.
The bank has almost increased its usership in the past year. At the end of 2020, K-Bank had under 5 million account holders. By the end of 2021, it had just under 7.2 million customers.
Some media outlets have reported that Upbit may have cornered between 70%-80% of the domestic crypto market, and its operator has already set its sights on overseas expansion into more competitive markets. An initial public offering has also been mooted by analysts, although the firm has neither confirmed nor denied its intentions. Market professionals say that the company would likely float in New York, as it is too large for the domestic stock exchange.
At one point last year, the partnership caused an “emergency” in the “management” of K-Bank’s “loan-to-deposit ratio,” with loans, mortgages and other services performing considerably worse than crypto deposits and withdrawal services.
K-Bank explained that it had made the decision to move its IT unit in order to “boost the level of its IT infrastructure,” the media outlet wrote, adding that its “number of customers has increased rapidly due to the recent launch of various new products and its partnership with Upbit.”