Korea Digital Asset (KODA), South Korea’s premier institutional crypto custody service, has witnessed a substantial growth in the value of crypto assets under its custodial care.
During the latter half of 2023, KODA reported an impressive surge of nearly 248% in the total value of crypto assets under its custody. Established through a strategic collaboration between major Korean bank KB Bank, crypto venture capital firm Hashed, and blockchain technology firm Haechi Labs, KODA disclosed that the value of these assets soared to approximately 8 trillion Korean won ($6 billion) by the end of the year. This marked a significant upswing from the 2.3 trillion won recorded at the conclusion of June 2023.
KODA’s burgeoning success underscores the pivotal role of crypto custodians in facilitating institutional investment in the crypto space within South Korea’s regulatory framework. Despite restrictions barring institutions and corporations from direct investments in crypto through exchanges, custodians like KODA provide regulated avenues for managing crypto assets.
According to KODA, their dominance in the local crypto asset custody sector reached an impressive 80% by the end of June 2023. Serving approximately 50 corporate clients and managing over 200 wallets, KODA remains at the forefront of the burgeoning demand for crypto custody services in South Korea.
Anticipating continued growth in demand for their services, KODA’s outlook remains optimistic, particularly in light of recent pledges by political parties ahead of South Korea’s general election on April 10th. Both the ruling and opposition parties have promised to introduce local spot Bitcoin exchange-traded funds (ETFs) and ease restrictions on institutional investments in crypto.
Furthermore, Lee Bok-hyun, South Korea’s head of the Financial Supervisory Service, is scheduled to engage in discussions with U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler regarding spot Bitcoin ETFs during an upcoming visit to the United States.
In a bid to further solidify their stance on crypto regulations, South Korea’s ruling People Power Party has proposed a two-year postponement of cryptocurrency investment taxation. This proposal aims to establish a comprehensive regulatory framework for cryptocurrencies before implementing taxation measures, potentially encompassing requirements for crypto custody providers and guidelines for token listing.
These regulatory developments signal South Korea’s proactive approach towards nurturing a conducive environment for crypto innovation and investment, setting the stage for continued growth and maturation of the country’s crypto ecosystem.
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