The real reason behind Rep. Kim Jin-tae questioning Upbit
Rep. Kim Jin-tae of the Liberty Korea Party asked the Financial Supervisory Service to look into a possible attempt from Dunamu’s cryptocurrency exchange Upbit to list Klay and Luna. Dunamu responded that Upbit and Kakao are separate companies and that there is no problem listing the coins on the exchange. 1. Klay’s Upbit listing and lock-up are arbitrary Kim is raising questions on the listing of Klay on Upbit and Upbit trying to list its own cryptocurrency Luna. Klay is a cryptocurrency developed by Ground X, a blockchain-specialized subsidiary of Kakao. “Upbit is a company that disturbed the trading order of crpytocurrency but is trying to list cryptocurrency Klay from its invested company Kakao,” Kim said. Kim also raised a question on the lock-up period for Klay. The coin was listed on Upbit’s foreign cryptocurrency exchanges in Indonesia and Singapore in September. Kim is suspicious of the coin being listed on foreign exchanges prior to being listed in Korea, adding that he is curious how the company decided on the three-month lock-up period, a time frame that Upbit designated. 2. Listing its own Luna is a means to make profit from capital gain Kim also pointed out that Upbit is trying to make profit from listing its own coin. He claims that Upbit purchased 20 million units of Luna to have it listed on the exchange. Upbit on July 26 listed Luna, a coin from Terra that Dunamu had invested in. Upbit owns 20 million units of Luna that the company directly purchased from Terra in the past. Upbit revealed such information in a regulatory filing on Sept. 30. Kim questioned whether the action is a standard trading practice and is a means to create a sound ecosystem for cryptocurrency. Dunamu claims that it didn’t only invest in Luna Dunamu maintains that there is no issue as the company has invested in cryptocurrencies other than Luna. A Dunamu spokesperson said that the company is an investment company and that it makes no sense that it unfairly benefited from getting information on the listing beforehand. He added that Upbit makes public announcements every month to be upfront about the amount of cryptocurrencies it holds and that the company is making investments to support long-term growth of the overall blockchain ecosystem. The spokesperson explained that Terra’s Luna also received investments from a number of conglomerates and venture capital firms that were looking for the growth of Korea’s blockchain industry. Lee Seok-woo says the company directly invested to foster the ecosystem During the Upbit Developer Conference held on Sept. 4, Dunamu CEO Lee Seok-woo responded to such accusations that the company made investments to help the local blockchain industry grow. “Even though we tried to open up blockchain-related businesses, traditional venture capital funds weren’t so interested in making investments, so we decided to make investments on our own in a vow to foster the ecosystem as a whole,” Lee said. “We weren’t trying to make an one-time profit; rather we did so to invest in promising projects that could benefit the whole environment.” Since April, Upbit has been revealing key information on cryptocurrency investments to its investors. Lee said Upbit has been trying to be transparent in doing so and make sure everyone has the same information. He added that Dunamu and Upbit are totally separated and are not sharing any information. “Kim raised the questions to launch his next attack” An industry source who requested to remain anonymous said that Dunamu and Kakao are not related whatsoever. “Dunamu and Kakao are completely different companies,” the source said. “Kakao already started making investments even before Upbit came into existence. Kakao owns less than 10 percent stake of Dunamu.” Kakao owns 8.1 percent of Dunamu, and Kakao-owned K-Cube Ventures essentially owns 11.7 percent of Dunamu, but directly owns less than 10 percent. The source said Kim has been raising his points to attack Daum, where public opinion against the minority party accumulates. Kakao acquired the second largest internet portal company Daum Communications in 2014 and absorbed it into the company.