According to an international newspaper report on the 14th, FTX, which applied for bankruptcy protection under Article 11 (Chapter 11) of the Bankruptcy Act, signed a business agreement with the city on August 30 to support the development of the Busan blockchain industry and the establishment of a digital asset exchange. In the agreement at the time, FTX announced its plan to establish a Busan branch and carry out projects using blockchain-specific education and Busan Blockchain Regulatory Free Zone in connection with local universities. Mayor Park Hyung-joon attended the signing ceremony in person and strengthened his will with CEO of FTX Amy Woo’s investment division.

The city believes that there will be no direct impact on the establishment of a digital asset exchange due to the FTX crisis, but is concerned about the rapidly shrinking market situation. A city official said, “FTX is just one of several places that have signed business agreements. The business agreement will not directly disrupt the business due to its strong declarative nature, he said. “However, there is a possibility that the contraction of the entire virtual asset market will affect the establishment of the exchange.”

In fact, FTX’s bankruptcy filing seems to be spreading to the entire virtual asset market. Since August, the city has signed business agreements with five overseas virtual asset exchanges, including Binance, the world’s No. 1 virtual asset exchange, and Huobi Crypto Dotcom Gate Io. However, among them, even Crypto Dotcom Huobi Gate Io is embroiled in a series of bankruptcy rumors.

Currently, the city is in the process of establishing a comprehensive plan related to the establishment of a digital asset exchange. The city planned to select an asset management company within this year and form an establishment promotion committee to form a holding company corporation on the exchange. As scheduled, asset management companies should be selected last month, but administrative procedures such as reviewing related laws such as the Framework Act on Digital Assets and consulting with the Financial Services Commission are known to take longer than expected. For this reason, the launch schedule at the end of next year could be delayed. Some argue that the FTX incident paradoxically shows the need for a digital asset exchange. A city official said, “Rather, we can see that the exchange needs to play a differentiated role in strengthening publicity, such as investor protection, in the virtual asset market, where uncertainty is high.”