HomeCRYPTO NEWSNeobank Ok-Financial institution Could Must Postpone IPO Plan as Crypto Winter Bites

Neobank Ok-Financial institution Could Must Postpone IPO Plan as Crypto Winter Bites

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An up-and-coming South Korean financial institution seems to be affected by the crypto market’s volatility – and should need to shelve its preliminary public providing (IPO) plans if crypto winter continues.

Per ENews At this time, Ok-Financial institution, the banking companion of the market-leading crypto trade Upbit, is “experiencing difficulties.”

The report defined that the financial institution – which had hoped to observe its largest rival Kakao Financial institution onto the inventory market – has been hit with a double whammy of unhealthy information.

The Upbit alliance introduced an enormous variety of prospects to the financial institution, buoying its market worth and main Ok-Financial institution to formulate formidable IPO plans. Underneath South Korean legislation, all crypto trade prospects should maintain an actual name-verified checking account with the trade’s companion financial institution, and conduct all their fiat-related transactions by this account.

With crypto funding skyrocketing throughout South Korea throughout the latest bull market, hundreds of recent prospects got here to Ok-Financial institution – drawn primarily by the truth that Ok-Financial institution, as a neobank, allowed crypto buyers to open their accounts on-line. They had been additionally drawn to the truth that Upbit has develop into the nation’s largest and busiest crypto buying and selling platform.

However because the market continues to stoop, buying and selling volumes have plummeted in South Korea. Late final 12 months, Upbit day by day buying and selling volumes peaked on the USD 20.3bn degree, per CoinGecko knowledge. However on the time of writing, that determine has shrunk to USD 3.3bn.

As of late March this 12 months, virtually half of all the cash ever deposited on Ok-Financial institution’s platforms originated from Upbit prospects.

Banking consultants warned {that a} mass sell-off of tokens might hit Ok-Financial institution’s liquidity. The financial institution has already skilled difficulties because of its Upbit partnership. Although Ok-Financial institution pocketed some USD 4.5m in charges from Upbit prospects in Q1 of this 12 months, sudden market swings have brought on issues similar to issues with Ok-Financial institution’s “loan-to-deposit ratio.”

A monetary sector skilled was quoted as opining:

“Ok-Financial institution wants to scale back its dependence on Upbit and intently monitor market sentiment. It could want to regulate the timing of its IPO.”

The second issue that would pressure Ok-Financial institution to rethink (or delay) its IPO might be the present inventory market stoop, which has been sparked by “international financial tightening.”

Ok-Financial institution was anticipated to start out formally chatting with the South Korean inventory trade a couple of itemizing earlier than the tip of the month, however, the media outlet acknowledged, “it’s now recognized that [the bank] is pondering twice” concerning the IPO.

Ok-Financial institution is eager to maintain tempo with Kakao Financial institution, which has already made its inventory market debut, however noticed its share costs plummet shortly after launching.

The report famous that different big-name companies, such because the safety supplier SK Shieldus and the One Retailer cell app market, had additionally tentatively withdrawn their very own IPO plans.

It added that one other Ok-Financial institution rival, Toss Financial institution, was additionally contemplating delaying its IPO plans for “two to 3 years” after initially stating that it needed to go public subsequent 12 months.

Banks that companion with crypto exchanges loved a bumper 12 months in 2021, when deposits on the 4 largest South Korean buying and selling platforms grew by 1,368%.

The variety of actual name-verified accounts at crypto trade companion banks rocketed up by 777% year-on-year in 2021, with not less than 7.3m crypto wallet-linked accounts opened.
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