South Korea’s National Police Agency has chosen Dunamu, operator of the Upbit exchange, to take custody of seized cryptocurrencies. This decision has sparked criticism from rival firms, who argue that the bidding process favored larger exchanges.
Implications of This Selection
The award to Dunamu comes following numerous reports indicating significant losses related to poorly secured USB wallets used for cryptocurrency storage. Critics are voicing concerns that the tender’s conditions disproportionately gave large exchanges an advantage over independent custody firms.
Contenders for the custody contract included several firms, with Dunamu achieving a high score in the bidding process:
- Dunamu: 94.73 points (84.73 for technical evaluation, 10 for pricing)
- Korea Digital Asset Custody (KDAC) & Korbit joint bid: 91.29 points
- Hecto Wallet One: 87.27 points
Despite Dunamu’s success, rival firms are highlighting that this arrangement suggests a lack of fair competition within the bidding process. They point to specific clauses regarding insurance and loss coverage as having undermined their proposals.
Contract Value and Future Prospects
The contract awarded to Dunamu is valued at 267 million won, approximately $193,000, for one year. It will enable the firm to manage all digital assets confiscated by the National Police Agency during criminal investigations.
With this decision, the police agency can now finalize negotiations with Dunamu, leaving other bidders in a position of uncertainty unless talks do not reach a conclusion. The selection of a dominant player like Dunamu raises questions about the future landscape of crypto asset custody in South Korea.
Looking Ahead
In the coming months, stakeholders will be watching how this arrangement unfolds and its impact on the competitive environment for custody services in the region. Observers are also keen to see if further regulatory changes will occur as a result of this selection process.
This material is for informational purposes only and is not financial advice.
