The FTX crash seems to have affected not only companies and investors, but also entire cities that had previously partnered with the struggling cryptocurrency exchange.
Government and financial authorities in Busan are increasingly concerned about the concept of a public-private digital exchange amid the FTX contagion.
“Given 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 engaged for a few months in setting up a local exchange of digital assets, signing several agreements with crypto exchanges. Building such a platform as a model of public-private partnership was reportedly a promise from Busan Mayor Park Hyung-joon.
In August 2022, the municipal administration of Busan announced a partnership with FTXplanning to build the Busan Digital Asset Exchange as part of the city’s ambitions to become a digital financial center in Asia.
Busan then also in partnership with Huobi Global crypto exchange, which has had a local office in South Korea since 2019. In October, Busan extended its crypto partnerships with the Crypto.com exchange.
Previously, Busan also sign a memorandum of understanding with Binance, aimed at rolling out the Busan Blockchain Regulation-Free Zone to promote blockchain initiatives and businesses.
The city of Busan was officially designated a regulation-free zone status for blockchain technologies in July 2019, planning to adopt various blockchain applications in sectors such as tourism, finance, logistics and public safety. The local government has been actively pursuing its blockchain plans ever since, launch development of a blockchain-based digital currency in collaboration with telecom giant KT in late 2019.
According to the latest report, the city of Busan is not giving up on its blockchain goals despite the eventual abandonment of its crypto exchange plans.
“Since Busan was designated as a blockchain-free zone, we will look for different ways to develop Busan into a financial center using it,” a local official reportedly said.