Woori Financial Group, one of the largest banks in South Korea, has partnered with Korean startup Coinplug to establish a digital asset custody service. Korean legislation is strict on cryptocurrency exchanges, requiring that they take measures to prevent anonymous transactions and money laundering by working with banks to establish that each user on the exchange has a “real-name bank account.” Korean banks have traditionally been reluctant to venture into cryptocurrency directly for liability reasons; however, a number of banks in the past year have begun partnering with or investing in exchanges to take advantage of relatively high interest in cryptocurrency in South Korea, a nation where one-third of workers reported having crypto investments in 2017. 

In July 2021, Woori and Coinplug announced that they were partnering to establish D-Custody, a custody service. KB Kookmin Bank, the largest bank in the country, had partnered with Haechi Labs in November 2020 for its custody service. In June 2020, Nonghyup Bank established a blockchain consortium with Hexlant, and is also planning on launching a custody service. In January 2021, Shinhan Bank invested in a cryptocurrency custody consortium backed by Korbit, a cryptocurrency exchange. Out of all of these partnerships, Coinplug is the most well-known internationally and has raised far more money than the rest, with a reported $14.8M in funding since its founding in 2013. Hexlant raised $400K in 2014, while Hexlant has raised $690K. One potential reason for this difference is the patent portfolio. Haechi Labs has 2 Korean patent assets, and Korbit and Hexlant each have 1 Korean patent application. In contrast, Coinplug has had 51 U.S. patent assets publish in the past 5 years, making it the largest East Asian company in the Cryptocurrency sector after the Alibaba Group. Many of Coinplug’s patents address document tracking and authentication using blockchain, which may be attractive for a bank worried about fraud and other security risks. The company also has 3 pending PCT applications. This international coverage may give Coinplug and/or Woori the opportunity to expand their offerings and services overseas. It’s notable that the Korean government has ownership in Woori as well as KB Kookmin Bank and may have interest in expanding tech presence overseas.

With all of these partnerships, will one cryptocurrency exchange come out on top? You can keep track with the Cryptocurrency Patent Forecast®.