Fee-Free Fiasco: The Hidden Costs That Left Investors Fuming
- Information-vulnerable consumers continue to suffer from overheated fee competitionBithumb 'commission coupon registration' conditions indicate 'trick marketing'Oligopoly structure encourages competition for market share...
- Recently, competition to reduce fees in the domestic virtual asset market is intensifying.
- It is expected that the policy of reducing the commission through healthy competition will improve consumer convenience in the long term, but at the same time, growing voices...
Information-vulnerable consumers continue to suffer from overheated fee competition
Bithumb ‘commission coupon registration’ conditions indicate ‘trick marketing’
Oligopoly structure encourages competition for market share… Authorities need to monitor
[사진 출처 = 코인판 갈무리]
Recently, competition to reduce fees in the domestic virtual asset market is intensifying.
It is expected that the policy of reducing the commission through healthy competition will improve consumer convenience in the long term, but at the same time, growing voices say that we must be wary of irrational marketing and side effects caused by overheated competition .
According to the virtual asset industry on the 26th, virtual asset exchanges are diversifying commission marketing, such as lowering commission rates through coupon payments and free application, and introducing market prices and limited prices.
In the process, damage to information-sensitive consumers and small businesses continues to mount. A representative example is the method of charging a fee of 0.25% or more by claiming to be ‘completely free of fees’ and attaching various detailed conditions.
Bithumb, which competes with Upbit for the first or second place in market share in the domestic virtual asset market, has been running an aggressive event called ‘Completely Free of Fees ‘ since the end of last year.
However, contrary to the word ‘free’, it was found that Bithumb actually collects fees on more than a quarter of all transactions, and the profit earned by this amounted to 25 billion won. Bithumb imposed a condition that the 0% commission rate would only be applied if the user directly registered a ‘commission coupon’, but users who did not register were subject to the highest commission rate among domestic virtual asset exchanges of 0.25%. Accordingly, Bithumb is criticized for ‘trick commission marketing’.
As a result of an analysis of the fee policies of major virtual asset exchanges by Kang Joon-hyun, a member of the Democratic Party of Korea and secretary of the Political Affairs Committee of the National Assembly, Bithumb’s effective fee rate from the first quarter of 2022 to the third quarter of last year was 0.048% . If we estimate the transaction amount by applying this to the commission-free event period from October last year to January last year, we got a commission income from transactions won of about 52 trillion.
![Images relating to virtual assets. [사진 출처 = 연합뉴스]](https://i0.wp.com/pimg.mk.co.kr/news/cms/202410/26/news-p.v1.20241025.e1d480fa50f245b3a74e7b0882d5c6f4_P1.png?ssl=1 "Fee-Free Fiasco: The Hidden Costs That Left Investors Fuming")
zoom in picture Images relating to virtual assets. [사진 출처 = 연합뉴스]
It is also noted that Bithumb’s actions may breach the Fair Trading Act. A virtual asset investor group also reported Bithumb to the Fair Trade Commission for unfair practices, claiming Bithumb’s no-fee policy was an attempt to exclude competing businesses from the market.
Representative Kang Jun-hyun said, “Healthy competition for users is a desirable direction in the virtual asset market, but in this process, there should be no possibility of causing misconceptions or mistakes by users, including those in groups who are n open to information,” and added, “Small exchanges suffer from excessive marketing incentivizing capital.” He pointed out, “Financial authorities and competition authorities should take monitoring and corrective action to prevent this from happening.”
The abnormal monopoly structure of the domestic virtual asset industry is also cited as the cause of heated competition to expand market share.
Previously, Lee Kang-il, a member of the National Assembly’s Political Affairs Committee, said in a government audit by the Financial Services Commission on the 10th that Upbit, the No. 1 virtual asset exchange in Korea, has a monopoly under the Fair Trade Act, which is more than 70% of the industry in market trading volume, deposits, sales and commissions It has been noted that the Financial Services Commission is sitting on the sidelines.
At the time, Financial Services Commission Chairman Kim Byeong-hwan acknowledged the current situation, saying, “I am aware of the problem,” and responded, “I will think about how we can solve the structural problems in the market. “
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