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Neobank K-Bank may have to postpone its IPO plan in the form of Crypto Winter Bites

According to ENews Today, K-Bank, the banking partner of market-leading cryptocurrency exchange Upbit, is “in trouble.”

An up-and-coming South Korean bank seems to be suffering from the volatility of the crypto market – and may have to postpone its initial public offering (IPO) plan if the crypto winter continue.

The report explains that the bank – which had hoped to follow its biggest rival Kakao Bank to the stock market – has been hit by a flurry of bad news.

The Upbit Alliance has brought a large number of customers to the bank, enhanced the bank’s market value and led K-Bank to plan an ambitious IPO. According to Korean law, all customers of a crypto exchange must have a real-name verified bank account with the exchange’s partner bank and do all their fiat-related transactions through this account.

With crypto investment skyrocketing across Korea during the most recent bull market, thousands of new customers have come to K-Bank – mainly attracted by the fact that K-Bank, as a is a new bank, allowing crypto investors to open their accounts online. They were also intrigued by the fact that Upbit has become the nation’s largest and busiest cryptocurrency trading platform.

But as the market continues to plunge, trading volume has plummeted in South Korea. Late last year, Upbit’s daily trading volume peaked at $20.3 billion, according to CoinGecko data. But at the time of writing, that number has dropped to $3.3 billion.

As of the end of March this year, almost half of the money ever deposited on K-Bank’s platform originated from Upbit customers.

Banking experts warn that the mass sell-off of tokens could affect the liquidity of K-Bank. The bank has been struggling due to its partnership with Upbit. Although K-Bank pocketed $4.5 million in fees from Upbit customers in the first quarter of this year, the sudden change in the market caused problems, such as problems with the “rate for loan on deposit” of K-Bank.

A financial sector expert was cited as choosing:

K-Bank needs to reduce its reliance on Upbit and closely monitor market sentiment. It may need to adjust its IPO timing.”

A second factor that could force K-Bank to rethink (or delay) its IPO could be the current stock market slump, caused by “global economic tightening.” .

K-Bank is expected to begin officially talking with the Korean stock exchange about the listing before the end of the month, but, media said, “it is currently known that [the bank] is think twice” about an IPO.

K-Bank wanted to catch up with Kakao Bank, which made its stock market debut, but its share price plummeted shortly after its launch.

The report notes that other big-name companies, such as security provider SK Shieldus and mobile app marketplace One Store, have also been scheduled to withdraw their own IPO plans.

It added that another K-Bank rival, Toss Bank, is also considering delaying its planned IPO for “two to three years” after initially stating that it wanted to list shares to the public next year.

Banks partnering with crypto exchanges had a bountiful year in 2021, as deposits on South Korea’s four largest exchange platforms increased by 1,368 percent.

The number of real-name verified accounts at crypto exchange partner banks has skyrocketed 777% year-on-year in 2021, with at least 7.3 million accounts linked to crypto wallets opened.