Upbit Operator Dunamu Wins Police Crypto Custody Contract

Several industry officials told local media those conditions were easier for an exchange operator like Dunamu to meet than for standalone custody firms with fewer resources. One custody industry official said competing against a major exchange under those requirements "wasn't an easy game from the start."

Some market participants also expressed disappointment with the evaluation process. An industry official told local media Dunamu was likely assessed favorably because of its experience running a 24-hour exchange and handling multiple digital assets. The same official noted a proposed on-site inspection of competing firms' security systems was not included in the evaluation.

The National Police Agency rejected suggestions the outcome favored a large company from the start. Local media reported the agency said the operator was selected through a fair competitive process.

The need for external custody gained attention after Bitcoin seized by the Gwangju District Prosecutors' Office was lost. Police later confirmed seized Bitcoin had gone missing in a separate 2022 incident.

The win comes as Dunamu faces regulatory scrutiny on other fronts. Earlier this month, the company disclosed that its planned all-stock share swap with Naver Financial had been postponed for a second time until Dec. 31, with several regulatory approvals still pending.