South Korea’s Kakao Pay to Halt Cryptocurrency Asset Services from February 16th
Kakao Pay announced it will discontinue encrypted asset services in South Korea starting from February 16, 2024.
South Korean technology conglomerate Kakao Company announced its decision to cease encrypted asset services provided by its mobile payment and digital wallet service, Kakao Pay — effective February 16, 2024.
Kakao Pay is a mobile payment and digital wallet service that facilitates a range of financial transactions, including mobile payments, online transactions and bill payments through its smartphone app. Utilizing near-field communications and QR codes, the service enables contactless payment options for users.
Since its inception in 2014 as the pioneer of mobile payment services in South Korea, Kakao Pay evolved into a leading provider in the industry. Offering a range of financial services, including online and offline payments, money transfers, membership services, bill payments, and authentication, Kakao Pay has consistently expanded its offerings.
Beginning with investment services in November 2018, Kakao Pay broadened its portfolio to include credit rating, loans and insurance — providing users with convenient access to a diverse array of financial solutions. In 2021, Kakao Pay raised $1.3 billion in its initial public offering (IPO), with shares priced at the top of the marketed range.
Since December 2022, Kakao Pay has been establishing partnerships with various South Korean companies to offer cryptocurrency asset services. In late 2023, Kakao Pay decided to terminate the previously announced second tranche stock purchase agreement the service entered with Siebert Financial earlier the year.
Additionally, Kakao Company encountered regulatory challenges, with South Korea’s President Yoon Suk Yeol calling for a review of its taxi app practices, citing concerns about monopolistic behaviors. Prior to this announcement, the corporation’s shares had experienced a 27% decline over three months, reflecting heightened concerns about regulatory uncertainties impacting the company’s valuation.
Fintech Companies Pivot to and from Cryptocurrencies
As regulatory landscapes shift and industry dynamics evolve, fintech companies are reevaluating their approach to cryptocurrency services.
Recently, British fintech company Revolut announced its decision to discontinue access to cryptocurrencies for customers from the United States. The company clarified that the move was prompted by considerations of the regulatory environment and uncertainties in the cryptocurrency market within the country.
The expansion includes new tools for users who have completed the KYC process, enabling money transfers and cryptocurrency purchases. Alchemy Pay emphasizes its commitment to compliance with regulations and aims to secure additional licenses as part of its expansion strategy in each country.
The Kakao Company’s decision to discontinue Kakao Pay crypto-related offerings reflects a complex interplay of regulatory considerations, market dynamics, and strategic recalibrations within the South Korean fintech sector.
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