South Korea’s Biggest Neobank Reportedly on Verge of Crypto exchange Banking Deal

Kakao Bank, South Korea’s biggest neobank and an affiliate of the internet giant Kakao, has refused to confirm or deny that it has struck a partnership deal with Coinone – one of the four biggest crypto exchanges in the country.

The banking firm’s CEO and leadership gave a presentation to reporters on May 3 amid reports that it has sealed a deal with Coinone to provide real name-verified fiat on/off ramp accounts to Coinone customers. Multiple media outlets – quoting unnamed banking and crypto sector sources – claimed that a deal had already been finalized.

Coinone currently has a banking deal in place with NongHyup (NH) Bank. However, this agreement is a rolling, six-month renewable contract, and industry insiders claimed that Kakao Bank could take over as early as next month or July.

Kakao Bank’s biggest neobanking rival, K-Bank, has partnered with the market-leading exchange Upbit. This partnership has proven almost too successful for K-Bank to deal with, and has propelled K-Bank’s customer base up beyond even the most conservative of estimates.

Other neobanks, Kakao included, have previously been cagey about the idea of partnering with crypto exchanges, but the political climate appears to be changing fast. The political team of the crypto-keen President-Elect Yoon Suk-yeol (who will be sworn in later this month), have already stated that “three or so” crypto exchanges would likely be granted fiat-crypto trading permits “in the second half of 2022.” Thus far, five trading platforms (Coinone included) have been granted such a license. Without banking deals, crypto exchanges cannot even apply for the necessary permits.

Chosun quoted the Kakao Bank CEO Yoon Ho-young as stating that his firm was “positive” about the prospect of a partnership deal with a crypto exchange, but made no direct mention of Coinone and refused to state when clarity on this matter might be forthcoming.

However, Yoon noted that his bank’s customers “are investing and managing virtual assets” among other “financial products.” He added that Kakao Bank was “expanding the scope” of its “customer service experiences” through “various alliances,” and was “looking positively” at a possible deal with an exchange.

Money Today, which was the first media outlet to publish news of the alleged Coinone deal this week, claimed that Kakao Bank has been “conducting practical consultation meetings” with Coinone for “about four months,” with “most of the negotiations” between the two parties already “completed.”

Kakao’s own crypto roots run deep. The firm’s subsidiaries have previously launched the Klaytn blockchain network, as well as its cryptoasset, KLAY. It was one of the earliest investors in Upbit, and many of the latter’s executives are former high-level Kakao employees.

   
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