Author: Tiger Research

Translation: Shenchao TechFlow

Introduction by Shenchao: The South Korean crypto market is undergoing a power shift. The era dominated by retail investors is coming to an end, as traditional financial institutions, before the regulatory framework is fully clarified, have begun aggressively claiming key infrastructures such as STO standard-setting, stablecoin payment tracks, and custody markets. Behind this seemingly calm MOU competition lies a struggle for control over the future front-end of digital asset finance—whoever controls these infrastructures will hold the gateway to customers for the next decade.

Partnerships and equity acquisitions between South Korean institutions and securities companies are accelerating in sync with the crypto market. However, the overall landscape remains difficult to perceive at a glance. Many partnerships have been announced, but actual business deployments are still rare. This report explores why the conversion rate is so low and why institutions continue to push forward.

Key Points

Institutional crypto activities in South Korea have surpassed the MOU (Memorandum of Understanding) stage and are now entering specific business operations and equity acquisitions of exchanges.

Institutions are secretly intensifying their competition for key financial infrastructures, including STO standard-setting, stablecoin payment tracks, and the custody market.

Domestic infrastructure builders are becoming the core pillars of institutional business, creating a South Korean local track that aligns with the Bank of Korea's CBDC framework and local regulatory requirements, thereby reducing reliance on foreign technology.

Overseas Web3 foundations' strategies for entering South Korea have completely shifted from retail community building to collaborating with large enterprises and financial institutions as traditional finance accelerates its market takeover.

1. The MOU Arms Race

The above image, prepared by Tiger Research, illustrates the connections in the South Korean institutional crypto landscape. However, this structure is not easy to discern at a glance. It is hard to distinguish which connections represent active business operations and which are merely MOUs; the boundaries between central hubs and peripheral participants remain blurred.

Notably, this complexity accurately reflects the status of the South Korean institutional crypto market. As confirmed by Tiger Research’s dataset—150 institutions and 196 partnerships—no hub has yet achieved dominant control over the market.

Domestic institutions are simultaneously establishing their positions throughout the market before regulations are fully clarified. The competition currently revolves around three battlefronts: stablecoins, STOs (Security Token Offerings), and custody (crypto asset storage).

It is also noteworthy that financial institutions are continuously acquiring equity stakes in exchanges, an action interpreted as a confidence-driven land grab before regulations are fully clarified.

2. The Battle for Exchange Equity

Less than 10 days after Hana Bank announced its acquisition of a 6.55% stake in Upbit's operator Dunamu for about 1 trillion won (approximately $720 million), Hanwha Investment & Securities approved an additional acquisition of 3.90%. On May 28 of the same month, Samsung Securities, Samsung SDS, and Samsung Card jointly announced a 4.0% acquisition. Future Asset Consulting had already signed an agreement to acquire a 92.06% stake in Korbit back in February, and reports indicate that Korea Investment & Securities and global exchange OKX are discussing a joint acquisition of Coinone.

This competition reflects a revaluation of crypto exchanges, which are now seen not just as platforms for transaction fees but as key customer touchpoints that can distribute stablecoins, custody services, security tokens, and RWA products.

Banks and securities companies gain indirect access to licenses such as VASP registration while ensuring the exchange's user base and liquidity. The current equity struggle is ultimately a race to see who will control the front end of digital asset finance.

3. The South Korean Crypto Market by Industry

An industry-specific analysis of the relationship map reveals an uneven landscape. The custody business operations are the most active, with many participants already running real-time services after clearing regulatory obstacles. In contrast, RWA and STO largely remain at the contract or MOU stage, waiting for related legislation to take effect. The stablecoin sector faces a similar stagnation, with no clear standard-setters in a position to dominate the market.

Due to the differing nature of barriers across industries, the strategies for breakthroughs also vary. Some participants are consolidating domestic alliances, awaiting regulatory openness. Others are turning towards overseas markets with faster regulatory advancements, seeking alternative pathways. The following sections explore specific barriers and participant strategies for each industry.

3.1. RWA/STO: Legislation Passed, Commercialization Infrastructure is the Bottleneck

The domestic STO market is divided into two camps: the KOSCOM-led alliance and the fragmented investment alliance led by Shinhan Investment & Securities. Future Asset Securities has taken an independent path, leveraging overseas operations rather than waiting for domestic infrastructure.

KOSCOM is a core financial network operator, with the Korea Exchange holding a 76.6% stake, pursuing a neutral infrastructure model that aligns with its founding mission, providing shared infrastructure for securities firms. It does not sign exclusive agreements with individual issuers, but integrates 11 securities companies onto its platform, aiming to set standards for issuance and distribution technology while ensuring compatibility with the comprehensive custody management requirements of South Korean securities depositories.

Shinhan Investment & Securities has rapidly established its own STO ecosystem. Beginning with a proof of concept in 2022 with Lambda 256, it launched the joint platform PULSE in 2024 and officially introduced multi-platform account integration services in 2025. In 2025 alone, it participated as an account manager in 10 investment contract securities offerings and acquired a controlling stake in the OTC exchange NXT, establishing an end-to-end pipeline from issuance to distribution within its ecosystem.

Future Asset Securities completely bypassed domestic infrastructure development, going straight abroad. It issued digital bonds in Hong Kong, obtained a retail license for digital assets from the Hong Kong Securities and Futures Commission, and plans to launch a market retail investor MTS in June. In the United States, it is the only South Korean securities company to join the DTCC-led tokenization working group, which includes JPMorgan, Goldman Sachs, and BlackRock, participating in global standard-setting discussions. This strategy positions Future Asset favorably in regulatory engagement and negotiation leverage once domestic STO infrastructure finally aligns with global standards.

3.2. Stablecoins: Legislation Not Technology is the Bottleneck

Participants in the stablecoin market are more diverse than in other industries. Card companies, exchanges, fintech companies, and infrastructure companies are entering through different routes, leveraging their respective advantages.

The largest camp is the Kakao Group. Kakao, KakaoBank, and Kakao Pay have formed a joint working group to build a "super wallet" covering stablecoins, cryptocurrencies, and local currencies. Their key asset is the infrastructure accumulated through the operation of the Kaia public chain since the Ground X era. Kaia has already deployed Tether (USDT) on its network and is conducting real-time payment tests.

Shinhan Card focuses on migrating its existing payment network to blockchain tracks. Shinhan Card signed an MOU with Solana in April, although the technical groundwork began before the agreement. The company has already partnered with Solana, Visa, Mastercard, and Fireblocks to complete initial proof of concept and is now conducting advanced testing in six areas, including wallets and smart contracts.

The exchanges are circumventing the delay in KRW stablecoins by using US dollar stablecoins. Dunamu is working with Naver Financial to develop a KRW stablecoin business based on its proprietary blockchain GIWA. Facing regulatory delays for KRW stablecoins, Bithumb chose to first ensure a US dollar stablecoin distribution network through partnerships with Circle and WLF. A joint KRW stablecoin plan with Toss is also under discussion, although progress has been slow.

All camps are active but face the same regulatory barriers. The Bank of Korea is promoting a 51% rule, requiring that only alliances with a majority of banks are allowed to issue stablecoins, while fintech companies are seeking access, delaying government-ruling party consultations. Once the issuance guidelines are published, the camp with the most comprehensive public touchpoints is expected to gain market leadership.

3.3. Custody: More Institutional Capital Needed

The custody market is structurally simpler than other industries. The four major custody institutions have each secured domestic and international financial and technological partners to establish their market positions.

KODA was jointly founded by KB Kookmin Bank, Hashed, and Haechi Labs, combining traditional financial capital with crypto-native VCs. Hana Investment & Securities, IBK Capital, and Kyobo Securities later joined as investors, further enhancing its stability with a dedicated custody insurance agreement from Samsung Fire and Marine Insurance.

KDAC is a custody institution dominated by traditional finance, with Shinhan Bank and NH Nonghyup Bank as major shareholders. NH Nonghyup Bank was initially an investor in another custody institution, Kardo, and became a KDAC shareholder after the merger. Following the merger, two of South Korea's five major banks became shareholders of KDAC.

BDACS has taken a unique approach focused on technology and partner development. By expanding custody and payment infrastructure through partnerships with Woori Bank and international digital asset infrastructure companies like Galaxy and GK8, it also signed an MOU with Circle to issue the KRW1 stablecoin on Circle’s Arc blockchain and is the only VASP and key custody partner in the KRX-led KDX alliance. BDACS is currently conducting a proof of concept for KRW1, positioning itself as a custodial institution addressing both custody and payment infrastructure.

BitGo Korea entered the domestic market with the technological strength of its global parent company. BitGo’s headquarters custodies over $70 billion in assets and handles approximately 20% of the global Bitcoin chain transactions. In Korea, Hana Financial Group and SK Telecom each hold shares, making it a custody institution supported by financial and telecommunications capital.

Various institutions have entered the market through their respective custody relationships. However, reports indicate that all major custody institutions recorded net losses last year, showing that their development outpaced the inflow of institutional capital needed to maintain operations.

In summary, the infrastructure development in STOs, stablecoins, and custody reveals a clear common limitation: domestic institutions have built business frameworks, but the underlying technological infrastructure largely relies on overseas solutions.

4. Infrastructure Builders

Relying on overseas solutions incurs structural costs: as the market grows, a significant portion of revenue will flow abroad in the form of technology licensing fees. If overseas partners change policies or increase costs, domestic infrastructure may also face disruption risks.

More fundamentally, areas needing to align with South Korea's specific regulatory environment—such as the issuance of KRW stablecoins, STO distribution rules, and domestic corporate account integration—cannot simply apply global solutions directly. This is why once the relevant legislation is finalized and capital begins to move seriously, domestic tech companies capable of directly designing and controlling the underlying tracks according to South Korea's regulatory framework will be essential.

Domestic companies that have identified this technological gap and are constructing Korea-specific financial infrastructure are already taking action. Leading technology providers are as follows.

4.1. LG CNS

Among traditional IT service companies, LG CNS stands out prominently. Since launching its proprietary blockchain platform "Monachain" in 2018, it has provided services to over 220 local governments through the local currency platform of the Korea Mint Corporation, accumulating operational experience.

This permissioned ledger experience translates into orders for CBDC and STO projects. As the main contractor for the Bank of Korea’s CBDC project "Han River," LG CNS is developing a government subsidy distribution system that utilizes deposit tokens. Through this process, it is establishing the capability to run institutional CBDCs and private digital currencies on a single network, effectively transplanting the safety standards and procedures of traditional finance onto the blockchain.

Building the KOSCOM joint STO issuance platform and Future Asset Securities STO platform follows the same logic. LG CNS does not directly issue assets but aims at three directions: building issuance and distribution platforms for banks, providing SaaS for payment operators including credit card companies, payment gateways, and simple payment services, and developing digital asset payment platforms for securities firms. Once the regulatory framework is finalized, it seems to be the most likely candidate to gain infrastructure contracts.

Among blockchain infrastructure companies, DSRV stands out for directly assisting financial institutions in accessing on-chain infrastructure. Operating as a validator and infrastructure company across more than 70 blockchain networks, DSRV manages over 40 trillion won (approximately $2.9 billion) in assets, ranking first in South Korean Ethereum staking and among the top ten globally.

A key development is its expansion from node operations to full-stack institutional on-chain infrastructure. Through DSRV Portal, financial institutions can access wallet, payment, tokenization, custody, and staking functionalities via API and dashboard interfaces. Financial companies can connect to user wallets, institutional wallets, periodic payments, token issuance, burning, transfers and locking, custody, and staking capabilities without having to build their own nodes and security infrastructure.

A trust mechanism is also in place. DSRV is the first to obtain VASP, ISMS, and SOC 1 Type 1 certifications, directly meeting the regulatory, security, and operational control needs required by financial institutions. In effect, this means that external infrastructure providers bear the wallet security, internal control, and operational risks that financial companies face when deploying on-chain services.

Its partnerships focus on the construction of payment tracks. DSRV is jointly developing remittance infrastructure compliant with Korean and Japanese regulations with SBI Ripple Asia. It collaborates with Circle to develop an institutional USDC issuance, redemption, and settlement framework that bypasses exchanges. It has signed a stablecoin payment infrastructure agreement to connect traditional card payment nets to the blockchain with BC Card.

DSRV recently completed a Series B funding round of 30 billion won (approximately $21.7 million) to accelerate technological development.

4.3. Altus (formerly B-Harvest)

Altus (formerly B-Harvest) operates at the integration layer between financial institutions' legacy systems and blockchain environments. Founded in 2018, the company has contributed to the development of EVM chains based on the Cosmos SDK and is an organization of over 40 engineers and researchers who have directly built multiple production networks, including Canto, Crescent, Stable, and Ault.

Altus handles protocol engineering and core architecture for Ault Blockchain, which is an institutional L1 focused on RWA, trading, and payments. In 2025, it contributed EVM integration, performance improvements, and security audits for the Bitcoin staking L1 Babylon to support its production readiness.

Its solutions for financial institutions stem from the same layer. Altus is building from scratch according to the financial industry's requirements: an on-chain and off-chain orchestration layer connecting legacy systems and blockchain execution environments, RWA tokenization, licensed exchanges, stablecoin payments and settlements, as well as institutional wallets and custody infrastructure.

Current internal R&D is proceeding in parallel: an architecture supporting selective data disclosure among institutions for the Canton Network, and a modular blockchain framework Commonware Stack aimed at 1 million TPS.

The three companies start from different positions and have different advantages. LG CNS leads in financial IT credibility, DSRV excels in blockchain validator infrastructure, and Altus leads in protocol-level custom design capability. However, all companies share the same goal: to acquire a core operating system before significant inflows of institutional capital. The determining factor will be how much credible building experience each company can accumulate before the market fully opens.

5. Retail Exits, Institutions Enter

The recent surge in partnership announcements should not be interpreted as ordinary business expansion. These are positioning moves: institutions seize advantageous arrangements before regulations solidify and then use these arrangements to influence the final shape of the regulatory framework. The current wave of collaboration is as much about regulatory design as it is about market competition.

The South Korean crypto market has undergone significant restructuring in just six months. The custody camp has formed, the STO alliance has taken shape, and major financial holding companies have acted to acquire stakes in exchanges. Meanwhile, retail trading volumes have plummeted significantly. The total trading volume of the five major exchanges in South Korea has decreased by approximately 48% year-on-year. The market focus is shifting rapidly from retail to institutions.

This shift has also changed how overseas crypto foundations approach South Korea. Just as Solana was adopted as a partner by Shinhan Card and Avalanche was adopted by Future Asset, the foundations entering the domestic market have shifted their main focus from trading volume to collaboration with financial institutions and large enterprises. The community meetups that once drove retail liquidity are no longer effective.

The results of this market restructuring are expected to manifest at KBW 2026, to be held in Seoul in September 2026, an event that consistently reflects mainstream market conditions. Looking at the confirmed list of speakers, traditional finance personnel account for the majority. Last year, overseas foundations competed with community perimeter activities incentivized by tokens; this year's focus is expected to shift toward substantive business discussions.

Tiger Research is the official research partner of KBW 2026.