Dunamu, the operator of crypto exchange Upbit, has been selected as the preferred bidder for the Korean National Police Agency's private custody service for seized cryptocurrencies, prompting grumbling that large firms may have been favored from the start. Police maintain they "selected the operator through fair competition," but the market says the conditions were difficult to meet for anyone other than a large firm like Dunamu.
According to the financial industry Wednesday, the National Police Agency selected Dunamu as the preferred bidder for its private custody service for seized cryptocurrencies. A consortium of K-DAC and Korbit came in second, while Hecto Wallet One ranked third.
Many in the industry called the outcome expected. In its project announcement, the National Police Agency required that seized cryptocurrencies be fully entrusted immediately and that bidders maintain a 24-hour response organization. In particular, it set a condition requiring 100% compensation in the event of losses from hacking. While such requirements are essential from the government's standpoint, many said the level was difficult for most custody firms, which are relatively under-resourced, to handle—unlike a corporation operating a large exchange such as Dunamu. An official at a custody firm said, "Compared with large exchanges, it wasn't an easy game from the start."
Some also voiced concern that there was insufficient opportunity for evaluation to verify actual operational capabilities. An official in the cryptocurrency industry said, "(Dunamu) appears to have been highly rated for its exchange's 24-hour response capability and its experience handling various cryptocurrencies," but added, "We proposed an on-site inspection to explain our actually operating infrastructure and security system, but it was not reflected in the evaluation process, which leaves us with regret." ▷See this paper's June 18 edition, Page 11.
