Neobank K-Bank May Have To Postpone Its IPO Plan As Crypto Winter Bites

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A booming South Korean bank appears to be suffering from crypto market volatility – and may have to put plans for an initial public offering (IPO) on hold if the crypto winter continues.

Per ENews today, K-Bankthe banking partner of the market leading crypto exchange Up bitit is “to experience difficulties”.

The report explained that the bank – which had hoped to follow its biggest rival Kakao Bank in the stock market – was hit with a double whammy of bad news.

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The Upbit alliance brought a large number of customers to the bank, bolstering its market value and leading K-Bank to formulate ambitious IPO plans. Under South Korean law, all crypto exchange customers must hold a real-name bank account with the exchange’s partner bank and conduct all their fiat-related transactions through this account.

With crypto investments surging across South Korea during the last bull market, thousands of new customers came to K-Bank – attracted primarily by the fact that K-Bank, as a neobank, allowed crypto investors to open their accounts online. They were also attracted to the fact that Upbit has become the largest and busiest crypto trading platform in the country.

But as the market continues to slump, trading volumes have plummeted in South Korea. At the end of last year, Upbit’s daily trading volumes peaked at the $20.3 billion level, according to data from CoinGecko. But as of this writing, that figure has dropped to $3.3 billion.

At the end of March this year, almost half of all the money ever deposited on K-Bank’s platforms came from Upbit customers.

Banking experts have warned that a massive token sale could affect K-Bank’s liquidity. The bank has already struggled due to its Upbit partnership. Despite the fact that K-Bank pocketed some $4.5 million in fees from Upbit customers in the first quarter of this year, the sudden market fluctuations caused issues such as problems with the “loan to deposit ratio”. from K-Bank.

A financial industry expert was quoted as saying:

“K-Bank needs to reduce reliance on Upbit and monitor market sentiment closely. The timing of its IPO may need to be adjusted.

The second factor that could force K-Bank to rethink (or delay) its IPO could be the current stock market slump, which was triggered by the “global economic squeeze.”

K-Bank was expected to begin talking to the South Korean stock exchange officially about a listing before the end of the month, but, the outlet said, “it is now known that [the bank] think twice” about the IPO.

K-Bank is keen to keep pace with Kakao Bank, which has already debuted on the stock exchange but saw its share price crash shortly after its launch.

The report noted that other major companies, such as security provider SK Shield and the A store mobile application market, had also tentatively withdrawn their own IPO plans.

He added that another K-Bank rival, Launch the bankwas also considering delaying its IPO plans for “two to three years” after initially saying it wanted to go public next year.

Banks that partner with crypto exchanges had a bumper year in 2021, when deposits on South Korea’s four largest trading platforms grew by 1,368%.

The number of verified real-name accounts at crypto exchange partner banks soared 777% year-on-year in 2021, with at least 7.3 million accounts linked to an open crypto wallet.
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– As Inflation ‘Eases’, Crypto Dip Likely in ‘The Second Half of 2022’ – VC Investor

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Neobank K-Bank May Have To Postpone Its IPO Plan As Crypto Winter Bites


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