The value of cryptocurrency held by South Korean investors more than halved over the past year, falling from 121.8 trillion won ($83.3 billion) at the end of January 2025 to 60.6 trillion won ($41.4 billion) by the end of February 2026.
Daily trading volumes across the country’s five major exchanges, including Upbit, Bithumb, Korbit, Coinone and Gopax, also took a hit, collapsing to $3 billion by February compared to $11.6 billion in December 2024, Korean outlet The Chosun Daily reported, citing data the Bank of Korea submitted to Rep. Cha Gyu-geun of the Rebuilding Korea Party.
Won deposits held at exchanges, a proxy for investor dry powder, also fell from 10.7 trillion won at end-2024 to 7.8 trillion won. The drop is attributed to a combination of falling crypto prices and capital flowing into the stock market.
Stablecoins bucked the trend. Holdings climbed from $60 million in July 2024 to a peak of $597 million in December before easing to $41 million in February, a far smaller decline than the broader crypto market.
Related: South Korea seeks 20-year sentence for Delio CEO over $169M crypto fraud
Tighter AML rules threaten to push investors away
The market contraction comes as regulators prepare to tighten oversight. Financial authorities plan to implement revised AML rules in August that would require crypto transactions above 10 million won involving overseas exchanges or private wallets to be automatically flagged as suspicious.
Top Korean exchanges by volume. Source: CoinGecko
Industry body DAXA has pushed back, arguing the rule is disproportionate and could drive users to offshore platforms like Binance. The industry body said the proposal could increase suspicious transaction reports from South Korea’s five largest exchanges by 85 times, from about 63,000 cases last year to over 5.4 million, making compliance difficult in practice.
Debate over the government’s planned 22% crypto tax, set for 2027, is also intensifying. On Thursday, South Korea’s Finance Ministry confirmed for the first time that a 22% tax on crypto gains will take effect as scheduled on January 1, 2027.
Related: Bithumb wins temporary court stay on South Korea suspension: Report
Samsung SDS to build South Korea’s blockchain securities platform
As Cointelegraph reported, Samsung SDS has won a contract to build and operate a blockchain-based securities platform for South Korea’s Korea Securities Depository (KSD), with the project expected to be completed by February 2027.
The move comes ahead of South Korea’s broader push to build market infrastructure for tokenized assets ahead of a new legal framework taking effect in early 2027.
Magazine: AI-driven hacks could kill DeFi — unless projects act now
