Key Highlights
- $60B left South Korean exchanges in H2 2025, showing growing overseas crypto activity and market challenges.
- Crypto accounts and deposits rose, but overall market value and trading volumes fell, pressuring exchange profits.
- Regulatory changes aim to cut taxes and boost fraud protection, balancing investor safety and market growth.
South Korea is witnessing a major shift in the domestic cryptocurrency space as about $60 billion left local exchanges for overseas wallets in the second half of 2025. The Financial Services Commission (FSC) reported that total outflows reached 90 trillion won, a 14% increase from the first half of the year.
According to the official release, much of the money is likely moving abroad for trading opportunities or other financial strategies. Even though more people opened accounts and deposits grew, profits for local exchanges still fell, highlighting the challenges the market faces.
By the end of 2025, South Korea had 11.1 million crypto exchange accounts, up 3% from mid-year. Deposits grew even faster, jumping 31% to 8.1 trillion won (~$5.4 billion). Despite this, the overall market value of cryptocurrencies in the country fell 8% to 87.2 trillion won (~$58 billion).
Daily trading also slowed, averaging 5.4 trillion won (~$3.6 billion), down 15% from earlier in the year. The FSC said that falling prices for major cryptocurrencies likely put pressure on both trading activity and exchange profits.
Regulatory and tax developments
South Korea is also changing how it regulates cryptocurrency. The People Power Party wants to remove the 20% tax on crypto profits by 2027. Party floor leader Song Eon-seok said, “Since digital assets are already classified as commodities…imposing additional income tax would raise the issue of double taxation.” The proposal also aims to treat foreign investors fairly and simplify rules, which could make the market easier to manage.
Meanwhile, the government is cracking down on fraud. From October, crypto exchanges must stop suspicious transactions and help victims recover their money, just like banks. The new rules allow crypto exchanges to sell crypto to help victims recover their money, making the process transparent and secure. This is aimed at protecting users while keeping crypto trading active.
South Korea’s crypto market is walking a fine line between eager investors, changing regulations, and global market pressures. With large amounts of crypto leaving the country, exchanges and lawmakers face growing pressure to safeguard both investors and the overall market.
Also Read: Australia’s Central Bank Moves From Exploration to Execution on Digital Token Use
