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FTX collapse triggers second thoughts on Busan City’s crypto exchange plans

The FTX crash seems to have affected not only companies and investors, but also entire cities that previously became partners of the troubled cryptocurrency exchange.

South Korea’s second largest city, Busan, is reportedly reconsidering its plans to build a local crypto exchange in the wake of the FTX crash, local news agency Yonhap reported on Nov. 23.

The government and financial authorities of Busan have become increasingly concerned about the concept of a public-private digital exchange amid the FTX contamination.

“In light of various conditions, it is unreasonable for the city of Busan to promote the establishment of a digital asset exchange,” a Busan City official reportedly said.

The South Korean city has been busy establishing a local digital asset exchange for several months, having signed several agreements with crypto exchanges. Building such a platform as a public-private partnership model was reportedly a promise of Busan Mayor Park Hyung-joon.

In August 2022, the Busan city administration announced a partnership with FTX, which plans to build the Busan Digital Asset Exchange as part of the city’s ambitions to become a digital financial hub in Asia.

Busan then also partnered with Huobi Global crypto exchange, which has a local office in South Korea since 2019. In October, Busan expanded its crypto partnerships with Crypto.com exchange.

Busan previously also signed a memorandum of understanding with Binance, aiming to deploy Busan’s blockchain regulation-free zone to promote blockchain initiatives and businesses.

Busan City was officially designated a status of a regulation-free zone for blockchain technologies in July 2019, planning to adopt various blockchain applications in industries such as tourism, finance, logistics and public safety. The local government has since been actively pursuing its blockchain plans, launching the development of a blockchain-based digital currency in collaboration with telecom giant KT in late 2019.

Related: South Korea Investigates Crypto Exchanges To List Native Tokens

Previously, Busan was also involved in cooperation with the local crypto-wallet pioneers such as Hyundai Pay, as well as the development of blockchain-enabled virtual power plants.

According to the latest report, Busan City is not giving up on its blockchain goals, although it may have abandoned its crypto exchange plans.

“Since Busan has been designated as a blockchain regulation-free zone, we will look for various ways to develop Busan into a financial center using it,” a local official reportedly said.

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