800 Billion Won Investment: The Challenge of 'App Integration' for Hanwha Investment & Securities and Coinone

Hanwha Investment & Securities faces limited synergy despite an investment of 800 billion won in Coinone. Coinone has extended its real-name account partnership with KakaoBank, but expanding trading volume remains a challenge. The institutional market and the institutionalization of spot ETFs are pivotal points.

"A hot potato worth 800 billion won."

Although Hanwha Investment & Securities has invested 800 billion won in Coinone, it is expected to take considerable time to realize the investment's effects. The business lines of Hanwha Investment & Securities and Coinone are structured in dual layers. Hanwha directly holds shares in Coinone while also providing indirect support through real-name accounts via KakaoBank.

It is currently difficult to gauge how much Hanwha will gain compared to its investment in Coinone, as Coinone's position in the domestic digital asset market is gradually weakening.

Recently, Coinone alleviated some operational uncertainties by extending its real-name account partnership with KakaoBank, but it still faces numerous challenges, including user and liquidity gaps and regulatory constraints. This is where Hanwha Investment & Securities' concerns begin.

Hanwha Investment & Securities, KakaoBank, and Coinone

According to the digital asset industry on the 20th, Coinone has recently extended its partnership for real-name verification deposit and withdrawal accounts (real-name accounts) with KakaoBank for another year. Coinone switched its partner bank from NH Nonghyup Bank to KakaoBank in November 2022 and has been renewing the contract annually.

This extension is the first re-contracting since Hanwha Investment & Securities joined as a major shareholder of Coinone. In May, KakaoBank confirmed the continuation of the partnership after inspecting Coinone's anti-money laundering (AML) system, despite the Financial Intelligence Unit's (FIU) history of sanctions and Coinone's accumulated losses.

However, the real-name account partnership is merely a minimum requirement for operating the won market and does not inherently increase users or trading volume. Even though Hanwha Investment & Securities holds a 27.16% stake in KakaoBank as a major shareholder, it is difficult to exert direct influence on the bank's AML review or re-contracting decisions, as Kakao retains the largest shareholder status by a single share.

Limitations of Synergy Despite Equity Investment and Partnerships

Looking at the investment details and the ongoing service collaboration, the synergy appears limited. Earlier, Hanwha Investment & Securities and OKX Ventures each secured 20% of Coinone's shares for approximately 800 billion won in May. However, of the total investment of 1.6 trillion won, only about 500 billion won directly flowed into Coinone through new share issuance, while the rest was used to buy existing shares from current shareholders.

Service integration is still in its infancy. Although Coinone established a 'stock investment' menu within its app in July, it merely provides a link to Hanwha Investment & Securities' web trading system (WTS).

Even if Hanwha Investment & Securities customers want to use Coinone, they must go through separate membership registration, open a real-name account with KakaoBank, and complete customer verification (KYC) procedures. Under current law, the business areas of securities firms and virtual asset operators are strictly separated, making it impossible to build a so-called 'super app' that allows trading of stocks and digital assets in one place for the time being.

Coinone Trapped in a 2% Market Share Amidst 96% Oligopoly by Upbit and Bithumb

As the expansion of external collaborations progresses slowly, Coinone's foundational strength is weakening. Coinone is projected to record 45.5 billion won in revenue and an operating loss of 6.3 billion won in 2025, continuing its streak of operating losses for four consecutive years since 2022. Thanks to non-operating income such as equity method gains, it achieved a net profit of 2.7 billion won, but it still cannot escape the deficit structure in its core business of trading brokerage.

This is due to the entrenched oligopoly of the top two exchanges. According to CoinGecko's data on trading volume over the past 24 hours, Upbit holds 64.5% (389.38 million USD) and Bithumb holds 32.3% (194.70 million USD), together dominating 96.8% of the entire market.

In contrast, Coinone's market share is only 2.5% (15.29 million USD). The number of users is also low, with Coinone's monthly active users (MAU) hovering around 300,000 in the first quarter of this year, meaning it needs to achieve over three times growth to meet its target of 1 million users for the second half of the year. Additionally, the average daily trading volume of the top five won exchanges in July dropped by 80.3% compared to January, further disadvantaging Coinone as investors flock to larger exchanges with thicker order books.

Stablecoin Events and New Listings Yield Only 'Short-lived Effects'

Attempts to find breakthroughs have also revealed clear limitations. Since October last year, Coinone has made the USDC won market fees completely free, raising its domestic stablecoin market share from 1.8% to 34.8% in just over a year. However, when Coinone's overall won market share briefly surged to around 14% in February, an abnormal phenomenon occurred where approximately 67% of the total trading volume was concentrated on just one stablecoin.

Compounding the issue, Upbit and Bithumb retaliated with stablecoin fee waivers and deposit reward events, intensifying the competition. For Coinone, continuing to waive fees means no profits, while withdrawing benefits leads to liquidity draining to competitors, creating a dilemma.

The new listing strategy has also failed to secure liquidity. Coinone's number of listed items is expected to surge from 282 at the end of 2024 to 394 by the end of 2025, an increase of 112 items, which is 36 more than Upbit's increase. However, from January to August 13 this year, Coinone had the highest number of 24 items out of 41 that fell below a market capitalization of 4 billion won for more than 30 days in two consecutive quarters. Many coins facing delisting risks are concentrated on Coinone.

Among these, 18 items have already been designated as items under trading caution or have been delisted. This indicates that new listings have only triggered short-term trading without generating sustained liquidity.

Regulatory Risks and Institutional Limitations: Hanwha's Role is a 'Long Game'

Regulatory risks continue to be a stumbling block. The Financial Intelligence Unit (FIU) detected approximately 90,000 violations of anti-money laundering obligations and about 30,000 violations of trading restrictions at Coinone in April, resulting in a three-month business suspension and a fine of 5.2 billion won, along with a reprimand for the CEO. Although the enforcement effect of the sanctions has been suspended due to a court's injunction, Hanwha Investment & Securities now has the prerequisite task of improving Coinone's internal controls before fully integrating business operations.

Ultimately, the analysis suggests that Hanwha Investment & Securities' investment in Coinone is more of a 'long-term strategy' aimed at the opening of the institutional market rather than a card aimed at a short-term rebound. Currently, Hanwha Investment & Securities is establishing a digital asset strategy department and preparing for digital assets, stablecoins, wallets, and security token offerings (STOs).

A digital asset industry insider stated, "Once the institutional market is fully opened, Hanwha Investment & Securities' extensive corporate and institutional network will flow into Coinone, securing new trading momentum. In the future, institutional products that connect traditional finance and digital assets, like spot ETFs, need to be expanded to create substantial collaboration opportunities for both companies."

He added, "For now, we can only maintain real-name accounts or limited service integrations, but if a regulatory foundation is established, various business opportunities will arise by combining Hanwha Investment & Securities' financial product management capabilities with Coinone's trading infrastructure."