2026-01-03 03:28:10

In early 2025, South Korean crypto investors sparked a "sea departure" wave. Within just a few weeks, over 160 trillion KRW (approximately $110 billion) of funds flowed into overseas trading platforms, a figure that clearly illustrates the severity of the issue.

The fundamental reason is simple—regulatory policies cannot keep up with market demand. The "Digital Asset Basic Law" has yet to be implemented, and stablecoin regulation remains a point of contention, leading to a significant regulatory vacuum in the Korean crypto market. Domestic exchanges are strictly restricted to spot trading only, with leverage and derivatives products completely banned for retail investors. As a result, investors seeking more flexible trading tools and risk management options can only turn to major overseas platforms, such as certain derivatives exchanges.

Ironically, the total number of crypto investors in South Korea has already reached about 10 million. While revenue for domestic exchanges like Upbit and Bithumb still looks decent on the surface, their growth has clearly slowed down. Market segmentation is becoming more apparent: a large user base, but limited activity and trading diversity. If this situation persists, calls for regulatory reforms will only grow louder.

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NFTragedy

· 11h ago

This is a classic case of shooting oneself in the foot. Korean regulators really should reflect on this. The regulatory vacuum has actually driven a wave of overseas exchange business, totaling $110 billion. That must be so frustrating. Instead of banning derivatives, it's better to quickly establish the basic legal framework; otherwise, it will only become more hollowed out. It's truly outrageous that domestic exchanges have been sidelined. Now, all the money is flowing overseas. 160 trillion Korean won is enough to show how serious the problem is. Regulators should wake up. Rather than watching users flee passively, it's better to loosen restrictions earlier. With this pace, local Korean exchanges will gradually fade away. The root problem is that regulatory speed can't keep up with market iteration—it's an old routine. Having 10 million users is pointless; user activity drops sharply, and future growth will be completely halted.

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