Korea's Capital Outflow Dilemma: 160 Trillion Won Regulatory Vacuum

2026-01-02 15:26:13

【Blockchain Rhythm】An interesting phenomenon is happening in the Asian cryptocurrency market. The latest data shows that last year, Korean investors transferred over 160 trillion KRW from domestic crypto trading platforms to overseas platforms, equivalent to about $110 billion. What does this number reflect? A severe mismatch between regulatory frameworks and market demand.

As one of the most active digital asset markets in Asia, South Korea has reached a scale of 10 million crypto investors. However, this market vitality is constrained by a relatively outdated regulatory system. The highly anticipated “Digital Asset Basic Law” was postponed again in December last year due to disagreements among regulatory agencies, with stablecoin issuance issues becoming the main sticking point. The “Virtual Asset User Protection Act” coming into effect in 2024 only provides basic protections and does not address the functionalities that market participants truly need, such as leverage trading and derivatives.

The result is: domestic trading platforms are increasingly losing their competitiveness. Once leading platforms like Upbit and Bithumb, despite generating tens of trillions of KRW in revenue, have seen growth stagnate. Meanwhile, overseas competitors like certain major exchanges and derivatives trading platforms have doubled their investor accounts within a year. Many Korean investors complain that domestic platforms offer too monotonous trading products, and they can’t even try more complex strategies.

This is not just a matter of capital transfer, but also a growing disappointment among market participants with the domestic trading environment. Regulatory gaps have amplified this disappointment, and investors are voting with their feet, choosing to flow to overseas platforms. South Korea’s cryptocurrency market remains vibrant, but its ecosystem is becoming fragmented.

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IronHeadMiner

· 5h ago

Regulation really is like this: the more restrictions, the more it pushes money out. That $110 billion in South Korea, to put it simply, is the cost of policies not keeping up with the market.

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BearMarketBuyer

· 5h ago

It's the same old story again. When regulation can't keep up, you have to run. 110 billion gone, Korea is digging its own grave.

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unrekt.eth

· 5h ago

$110 billion just ran away like that, and Korean regulators are still bickering. It's hilarious. --- Stablecoin card has been delayed for so long, is it really interesting to keep postponing? --- Leverage and derivatives are not allowed to be played, so what can users do? Go overseas. --- The contrast between regulation and market demand is so big that it will have to change sooner or later. --- Only Korea could review a basic law in ten months and end up like this. --- Local platforms are really going to cool down; the trust of 10 million investors has been shattered.

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airdrop_whisperer

· 6h ago

South Korea's recent regulation is really shooting itself in the foot, saying 110 billion USD just runs away... Delays in policy implementation cause investors to leave, if it were me, I’d also look for overseas exchanges. Why haven't the regulators understood what market demand is? Stablecoins are just a joke. Domestic platforms are crying and collapsing, being driven overseas by regulation. This is a classic case of "I want to protect you," but in the end, users are left with nothing. A market of 10 million people is being forcibly squeezed by policies, going in the wrong direction. Derivatives leverage is off-limits, so what are investors after? Might as well go overseas directly. Korean regulators really need to reflect on this.

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