South Koreans moved greater than 160 trillion received ($110 billion) from native crypto exchanges to international platforms final 12 months due regulatory restrictions within the nation, one in all Asia’s most energetic digital asset markets, a joint Coingecko and Tiger Analysis report revealed Friday.
The regulatory framework has been gradual to evolve. In December, the long-awaited Digital Asset Fundamental Act (DABA), a sweeping framework meant to manipulate crypto buying and selling and issuance, was delayed because of disagreements among regulators over stablecoin issuance. The Digital Asset Person Safety Act, which got here into pressure in 2024, doesn’t tackle market construction points similar to leverage or derivatives buying and selling.
The regulatory hole raised considerations amongst market individuals that Korea’s centralized crypto exchanges (CEXs) are more and more unable to compete with offshore platforms providing extra complicated buying and selling merchandise.
“The variety of South Korean buyers holding giant sums in abroad cryptocurrency alternate accounts has greater than doubled in a 12 months, reflecting each the worldwide market’s resurgence and rising frustration with South Korea’s restrictive buying and selling atmosphere,” Korean information company Aju Press reported in November.
The analysis discovered that cryptocurrency has change into a main funding asset in South Korea, with investor numbers rising to 10 million and exchanges similar to Upbit and Bithumb producing revenues within the trillions of received.
Progress, nonetheless, is stagnating, at the same time as Korean buyers proceed to commerce crypto actively and more and more flip to foreign-based platforms similar to Binance and Bybit, in accordance with the report.
The report mentioned the principle motive Korean buyers are shifting funds offshore is the hole in funding alternatives, as South Korea prohibits home exchanges from providing crypto derivatives to retail merchants.
“Home CEXs face strict rules that restrict them to identify buying and selling, whereas international CEXs fill this hole with extra complicated merchandise, together with leveraged derivatives,” it mentioned.
