Busan reconsiders crypto exchange plan after FTX crash

The FTX collapse could be prompting Busan to reappraise plans to become blockchain hub

Busan skyline                                 
Busan skyline – Photo: Shutterstock
                                

The fear, uncertainty and doubt generated by the collapse of the FTX exchange has taken its toll on the South Korean cryptocurrency sector. 

According to local news agency Yonhap, the administration of the South Korea’s second-largest city, Busan, is reconsidering its plan to build a local cryptocurrency exchange. 

The report cited a city official who said: “In view of various conditions, it is unreasonable for the city of Busan to promote the establishment of a digital asset exchange.”

It comes after FTX collapsed following a liquidity crisis that led it to file for bankruptcy on 11 November.

Regulation free zone

In 2019, Busan was officially made a regulation-free zone for blockchain technologies and set out to become a leading digital hub, integrating blockchain applications into various sectors such as finance, logistics, public safety and tourism.

The city entered into a memorandum of understanding with Binance in 2022 to assist and enhance its blockchain infrastructure. 

Shortly afterwards, authorities partnered with FTX. In addition to plans to create the Busan Digital Asset Exchange, the now-bankrupt firm also committed itself to promoting blockchain education in Busan’s universities. 

Another partnership with Huobi Global soon followed, while an existing arrangement with Crypto.com was extended. 

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