Grabbing Equity, Battling for Infrastructure: The Great Korean Crypto Institutional Brawl

Original Authors: Henry Kim, Ryan Yoon

Translation: Chopper, Foresight News

South Korean financial institutions are accelerating cooperation and equity acquisitions in the crypto sector, yet the industry landscape remains intricate. Various cooperation agreements are frequently announced, but truly commercialized projects are few and far between. This article analyzes the reasons for these low implementation rates and why institutions continue to increase their commitments.

TL;DR

• Institutional crypto businesses in South Korea have moved from letter-of-intent stages to substantive operations and exchange equity acquisitions.
• Major institutions are competing for influence over critical financial infrastructure, including security token offering (STO) standards, stablecoin payment channels, and the asset custody market.
• Local infrastructure providers are emerging as core pillars of institutional business. Companies leverage the Bank of Korea's CBDC framework and local regulations to build proprietary technology chains, reducing reliance on overseas technology.
• The South Korean strategies of overseas Web3 public chain foundations have fundamentally shifted. Traditional finance is now dominating the market. Overseas institutions are no longer targeting retail community engagement; instead, they seek partnerships with large corporations and financial institutions.

Deluge of Letter of Intent Signings: The Industry Enters a "Signing Competition"

The above chart, compiled by Tiger Research, maps the cooperation network of various institutions in the South Korean crypto market. The entire landscape is intricate, making it difficult for outsiders to distinguish which partnerships are operational and which remain at the stage of intent. The boundary between core industry players and peripheral participants is also very blurred.

This complex landscape accurately reflects the current state of South Korea's institutional crypto market. Tiger Research analyzed 150 institutions and 196 cooperation cases, finding that no single entity has achieved absolute dominance.

Before relevant regulatory frameworks are officially established, local South Korean institutions are scrambling to secure their positions and claim their territory. Current competition is concentrated in three main areas: stablecoins, security token offerings (STOs), and crypto asset custody.

Another notable trend is the aggressive acquisition of crypto exchange equity by financial institutions. Industry insiders view this as a signal of institutions securing market positions ahead of regulatory clarity and demonstrating their long-term bullish outlook.

The Full-Scale Battle for Exchange Equity Begins

Hana Bank announced it would spend approximately 1 trillion won (about $720 million) to acquire a 6.55% stake in Dunamu, the operator of Upbit. Just ten days later, Hanwha Investment & Securities received approval to increase its stake by an additional 3.90%. On the 28th of the same month, Samsung Securities, Samsung SDS, and Samsung Card jointly acquired a 4.0% stake in the platform.

Mirae Asset Securities signed an agreement in February this year to acquire a 92.06% stake in the Korbit exchange. There are also reports that Korea Investment & Securities is in talks with global exchange OKX to jointly acquire Coinone.

The valuation logic for crypto exchanges in the capital market has changed. Exchanges are no longer just platforms earning trading fees. They are becoming core traffic gateways for distributing stablecoins, custody services, STOs, and real-world asset (RWA) tokenization products.

By holding exchange equity, banks and brokerages can indirectly acquire relevant Virtual Asset Service Provider (VASP) status while firmly controlling the platform's users and liquidity. This equity battle is fundamentally a competition for control over the front-end traffic and distribution channels of digital finance.

Current Status of South Korea's Crypto Sub-sectors

From the cooperation network, it's evident that development progress varies significantly across crypto sub-sectors. The asset custody field has the most implemented projects, with many players having overcome regulatory hurdles and officially launched services. RWA/STO tokenization mostly remains at the signing or intent stage, awaiting supporting legislation. The stablecoin track is also progressing slowly, with no company currently establishing industry standards or leading the market.

The obstacles hindering development differ for each sub-sector, and institutions' strategies to overcome them are diverging. Some companies are partnering with local allies, waiting for regulatory easing. Others are turning to overseas markets with more mature regulatory frameworks to forge their own paths. The following sections analyze the development bottlenecks and player strategies for each track.

Real World Assets / Security Token Offerings (RWA/STO): Legislation Enacted, Commercial Infrastructure Remains the Biggest Weakness

South Korea's domestic STO market is currently divided into two main camps: the alliance led by the Korea Securities Information Corporation (KOSCOM) and the fractional investment alliance led by Shinhan Investment & Securities. Mirae Asset Securities has taken a different path, bypassing the wait for local infrastructure development and instead deploying directly in overseas markets.

KOSCOM, which is 76.6% owned by the Korea Exchange (KRX), operates the core financial network in South Korea. Its strategy is to build a neutral, shared infrastructure to serve all securities firms. Rather than signing exclusive agreements with single issuers, it has onboarded 11 securities firms to its platform, aiming to unify technical standards for STO issuance and circulation, and connect with the centralized custody system of the Korea Securities Depository.

Shinhan Investment & Securities has rapidly built its own STO ecosystem. It completed a proof-of-concept with Lambda 256 in 2022, jointly launched the integrated platform PULSE in 2024, and rolled out a multi-platform account aggregation service in 2025. In 2025 alone, the institution participated in 10 investment contract-type security token offerings as an account manager and acquired a controlling stake in the OTC exchange NXT, establishing a channel from token issuance to circulation.

Mirae Asset Securities, on the other hand, has completely bypassed local infrastructure, focusing entirely on overseas expansion. The firm issued digital bonds in Hong Kong, obtained a virtual asset retail license from the Hong Kong Securities and Futures Commission, and plans to launch an intelligent trading system for local retail investors in June. In the US, it is the only Korean securities firm to join the tokenization working group of the Depository Trust & Clearing Corporation (DTCC), participating in global standard-setting alongside institutions like JPMorgan, Goldman Sachs, and BlackRock. This strategic deployment will give it a competitive advantage in compliance and negotiation when connecting future domestic STO systems to global standards.

Stablecoins: Technology Mature, Regulation is the Key Barrier

The stablecoin track features the most diverse set of participants, including credit card companies, exchanges, fintech firms, and infrastructure providers, each leveraging their unique strengths to enter the market.

Kakao Group represents the largest camp. Kakao, KakaoBank, and Kakao Pay have formed a joint task force to create a "super wallet" encompassing stablecoins, cryptocurrencies, and local currencies. The team's core advantage stems from the infrastructure capabilities accumulated over years of operating the Kaia public chain. The public chain has already launched USDT and is conducting real-world payment tests.

Shinhan Card is migrating its existing payment network onto a blockchain platform. The institution signed a letter of intent with Solana in April this year, but technological development had already preceded it. It previously completed a proof-of-concept with Solana, Visa, Mastercard, and Fireblocks, and is now conducting in-depth testing across six modules, including wallets and smart contracts.

Due to regulatory delays concerning the Korean won stablecoin, the exchange camp is prioritizing the USD stablecoin track. Dunamu is collaborating with Naver Financial to develop a Korean won stablecoin business based on its proprietary GIWA blockchain. Bithumb has paused its Korean won stablecoin efforts, first establishing a USD stablecoin distribution network in partnership with Circle and WLF, while also discussing a joint Korean won stablecoin issuance with payment platform Toss. However, overall progress remains slow.

Although the various camps are active, they all face the same regulatory hurdle. The Bank of Korea has proposed a 51% shareholding rule, requiring the issuer of a Korean won stablecoin to be a consortium majority-owned by a bank. Fintech companies have objected to this, leading to government delays in finalizing issuance details. Once the formal rules are established, the camp with the most extensive front-end traffic channels is likely to dominate the market.

Asset Custody: Business Launched, But Still Awaiting Institutional Capital Influx

Compared to other tracks, the custody market landscape is clearer. The four major custodians have all strengthened their market positions by partnering with domestic and international financial and technology partners.

KODA was co-founded by Kookmin Bank, crypto VC Hashed, and Haechi Labs. Subsequently, Hanwha Investment & Securities, IBK Capital, and Kyobo Securities acquired stakes. It also signed an exclusive custody insurance agreement with Samsung Fire & Marine Insurance, establishing a robust risk control system.

KDAC is a traditional finance-led custodian, with Shinhan Bank and Nonghyup Bank as its two major shareholders. Nonghyup Bank originally invested in another custodian, Kardo; the two entities merged and formally joined KDAC. Two out of South Korea's top five banks are now among its shareholders.

BDACS focuses on technology and ecosystem partnerships, collaborating with domestic and international institutions like Woori Bank, Galaxy, and GK8 to expand custody and payment infrastructure. It also partnered with Circle to issue the Korean won stablecoin KRW1 on its Arc public chain, currently undergoing proof-of-concept testing. BDACS is also the designated Virtual Asset Service Provider and core custody partner for the KDX alliance led by the Korea Exchange (KRX), simultaneously developing both custody and payment operations.

BitGo Korea entered the market leveraging its parent company's global technological expertise. BitGo's headquarters custodians over $70 billion in assets, handling approximately 20% of global Bitcoin on-chain transactions. It counts Hana Financial Group and SK Telecom as shareholders, providing a blend of financial and telecommunications capital background.

Many financial institutions conduct business through these custodians. However, reports indicate that all four major custodians were in a loss-making state last year. This suggests that while the industry infrastructure has been built in advance, it has not yet attracted the large-scale institutional capital needed to sustain operations.

Analyzing the current state of the STO, stablecoin, and custody tracks reveals a common issue: although local South Korean institutions have set up a complete business framework, the underlying technology remains highly dependent on overseas solutions.

The Rise of Local Infrastructure Service Providers

Long-term reliance on overseas technology creates structural vulnerabilities. As the industry scales, substantial revenue can flow overseas in the form of technical licensing fees. Furthermore, adjustments in policies or fee increases by overseas partners could expose local businesses to risks.

A deeper conflict lies in the fact that scenarios like issuing a Korean won stablecoin, establishing STO circulation rules, or connecting with local corporate accounts require deep alignment with South Korean regulatory requirements, making it impossible to directly apply global generic solutions. For this reason, once relevant legislation is enacted and large-scale capital enters the market, local tech companies capable of independently designing and controlling the underlying technology chain will become a market necessity.

A group of local companies have already identified this technological gap and are focusing on developing financial infrastructure tailored for South Korea. The key players are as follows:

LG CNS

Among traditional IT service providers, LG CNS has the most prominent presence. The company launched its proprietary blockchain platform, Monachain, in 2018. Leveraging local currency services provided by the Korea Minting and Security Printing Corporation, it provides on-chain services to over 220 local governments, accumulating significant operational experience.

Building on this technical foundation, LG CNS has won contracts for the Bank of Korea's CBDC project 'Hangang' and related STO projects. As the general contractor for the central bank's CBDC project, it is responsible for building a system for distributing government subsidies based on deposit tokens. This enables institution-level CBDCs and private digital assets to operate on the same network, seamlessly transferring the security standards and processes of traditional finance to the blockchain.

Additionally, the company has undertaken the development of STO platforms for KOSCOM and Mirae Asset Securities. Its business strategy focuses on three main directions: building token issuance and circulation platforms for banks, providing software services for credit card companies and payment processors, and creating digital asset payment platforms for securities firms. Once regulations are finalized, LG CNS is expected to be a key winner in the local infrastructure market.

DSRV

DSRV is a leading blockchain infrastructure service provider. Its portfolio covers over 70 public chains, managing assets worth over 4 trillion won (approximately $2.9 billion). It ranks first in South Korea and among the top ten globally in terms of Ethereum staking volume.

The company has evolved from a simple node operator into a comprehensive institutional on-chain infrastructure provider. Its DSRV Portal allows financial institutions to use wallets, payments, asset tokenization, custody, and staking functions via APIs and data dashboards. Financial institutions can quickly launch personal wallets, institutional wallets, automated payments, token issuance/destruction/transfer/locking, asset custody, and staking services without needing to build their own nodes and security systems.

DSRV has obtained several certifications, including VASP, ISMS, and SOC 1 Type 1, directly addressing financial institutions' core requirements for compliance, security, and risk control. It handles wallet security, internal controls, and operational risks that financial institutions prefer to outsource.

Its cooperation strategy focuses on cross-border and on-chain payment rails: collaborating with SBI Ripple Asia to develop compliant cross-border remittance infrastructure between Japan and Korea; partnering with Circle to build an institutional-grade USDC issuance, redemption, and settlement system independent of exchanges; and working with BC Card to bridge traditional credit card networks with stablecoin payment channels. The company recently completed a 30 billion won (approximately $21.7 million) Series B funding round to accelerate technological iteration.

Altus (formerly B-Harvest)

Altus focuses on the integration layer connecting legacy traditional finance systems with blockchain. Founded in 2018, the team comprises over 40 engineers and researchers. It has been deeply involved in developing EVM-compatible public chains based on the Cosmos SDK, leading the creation of several commercial public chains like Canto, Crescent, Stable, and Ault.

The company provides protocol development and underlying architecture design for Ault, an institution-grade L1 blockchain focusing on RWA, trading, and payments. It also handled EVM adaptation, performance optimization, and security audits for the Bitcoin staking L1, Babylon, ensuring its successful mainnet launch.

For financial institutions, Altus builds solutions tailored to financial industry needs from the ground up: cross-chain orchestration layers connecting legacy systems and blockchains, tokenization frameworks for real-world assets, permissioned exchanges, stablecoin payment and settlement systems, and institutional wallets and custody infrastructure.

It is currently advancing two major R&D projects: the Canton network architecture for selective data disclosure between institutions, and the Commonware Stack, a modular blockchain framework targeting a throughput of one million transactions per second.

These three companies each have their own strengths. LG CNS excels in traditional financial IT reputation, DSRV relies on its node and staking infrastructure, and Altus specializes in custom underlying protocols. However, their goal is identical: to secure a dominant position in the core underlying system before large-scale institutional capital enters. The ultimate winner will be determined by the commercial, real-world experience each accumulates before the market fully opens.

Retail Exits, Institutions Dominate the Market

The recent wave of cooperation agreements is not merely business expansion but a strategic positioning by institutions ahead of regulatory clarity, an attempt to even influence the final regulatory framework. The current cooperation competition is less about market share and more about shaping the regulatory environment itself.

In just six months, the landscape of the South Korean crypto market has been completely reshaped: custody camps have formed, STO alliances have emerged, and major financial holding companies have acquired exchange equity. Concurrently, retail trading enthusiasm has cooled significantly. The combined trading volume of South Korea's five major exchanges has dropped approximately 48% year-on-year, accelerating the market's shift from retail to institutional dominance.

This market transformation has also rewritten the localization strategies of overseas Web3 public chain foundations. Shinhan Card chose Solana, Mirae Asset Securities partnered with Avalanche – such examples are increasing. Overseas institutions are no longer relying on offline community events to attract retail investors. Instead, they are focusing on connecting with local financial giants and large enterprises. The traditional community engagement model has become ineffective.

Korea Blockchain Week 2026 (KBW 2026), to be held in Seoul this September, is likely to showcase the results of this industry transformation. Based on