Number of Registered Cryptocurrency Exchanges in South Korea Drops to 31
South Korea's cryptocurrency market is experiencing significant pressure as registered exchanges decline sharply. A report from the Financial Intelligence Unit (FIU) shows only 31 crypto trading firms remain registered, a decrease of over 26% from 42 last year.
- Delisted exchanges like ProBit and Huobi Korea struggled due to limited fiat trading support.
- Many operated without real-name bank accounts, complicating financial transactions.
- Some exchanges failed to renew registrations, leading to automatic removal from the registry.
- Remaining firms may exit the market or shift operations overseas due to regulatory uncertainty.
Token-Only Platforms on the Brink
- Over 90% of token-only exchanges experienced complete capital erosion last year.
- Regulatory challenges exist as laws require partnerships with local banks for fiat transactions.
- Banks are reluctant to engage with smaller platforms due to strict anti-money laundering policies.
- Market consolidation is occurring as larger players dominate, pushing smaller firms out.
Future closures are likely as some exchanges may exit voluntarily or face enforcement actions. Major players, including Upbit, are also under scrutiny for compliance issues.
Bitcoin Kimchi Premium Soars in South Korea
Despite these challenges, South Korea’s crypto market exhibits unique characteristics. The "kimchi premium" — the price gap of bitcoin between South Korean platforms and global exchanges — recently reached its highest level in ten months at 9.7%.
- The premium reflects strict capital control policies preventing foreign investor access.
- Local investors face regulatory hurdles when attempting arbitrage opportunities.