Three South Korean banks earned USD 31.2m from their crypto exchange partnership deals in 2021, new data has revealed – suggesting that partnering with trading platforms could be paying off for the often-cautious domestic banking sector.

South Korean law requires crypto exchanges who offer fiat KRW trading pairs to partner with banks, who must provide platforms with fiat on/off ramps. They must also absorb the potential money laundering risks involved – as any violation in this regard is counted as a black mark against the bank.

However, a huge uptick in crypto trading early last year saw trading volumes skyrocket on most major platforms. As crypto customers are legally obliged to hold real name-verified bank accounts at their exchange of choice’s partner bank, this has also driven up customer account opening figures for all three banks.

The success has been almost overwhelming for the market leader Upbit and its partner bank, the neobank K-Bank. Upbit’s operator Dunamu has been officially classified as conglomerate-sized company by the markets regulator – the first crypto firm in the nation to be classified as such. Conglomerates in South Korea are subject to a set of restrictive regulations.

For K-Bank, the Upbit partnership brought in USD 22.76m last year, per data compiled by the regulatory Financial Supervisory Service by the MP Yoon Chang-hyeon, a member of the National Assembly's Political Affairs Committee – and reported by MBC.

The figure represents an x30 rise from 2020, when K-Bank made just over USD 750,000 from its Upbit-related business.

The surge caused major disruption for the bank at the height of the most recent crypto rush in South Korea, with the bank thrown out of kilter with an “emergency in managing