Recent analysis has unveiled that a staggering amount of approximately $110 billion, equivalently ₩160 trillion, moved from South Korean cryptocurrency exchanges in 2025. This shift did not indicate a downturn in trading; instead, it signified a transition of funds to international exchanges offering a broader array of products and services for investors.
Regulatory Constraints Prompting Expatriation of Funds
As illuminated in various reports, stringent regulations limit local platforms primarily to basic spot trading. This restriction has compelled many South Korean traders to explore overseas venues like Binance and Bybit, where they can access more sophisticated investment options. The comprehensive study undertaken by CoinGecko and Tiger Research serves as the pivotal reference for the highlighted $110 billion figure.
Financial Systems and Regulatory Environment Drive Behavior
A recent joint report from CoinGecko and Tiger Research notes that over KRW 160 trillion (approximately $110 billion) in crypto assets were transferred from local exchanges to international platforms due to regulatory limits confining exchanges to basic trading options. Korean… pic.twitter.com/KrYgFurdsm
— Wu Blockchain (@WuBlockchain) January 2, 2026
In recent years, South Korea has tightened compliance and enhanced user protection mechanisms. Despite the introduction of laws like the Virtual Asset User Protection Act in 2024, traders argue that these regulations have not fully established a comprehensive framework for broader market functionality.
There has been debate among lawmakers regarding the proposed Digital Asset Basic Act. However, delays in its introduction have created gaps that many traders find restrictive. Consequently, an increasing amount of Korean-held cryptocurrency has shifted to international wallets and platforms.
Fee Structures and User Dynamics
Analyses by various platforms indicate that revenue from Korean users on international exchanges has become considerable. Expectations suggest that user-based fees climbed to around ₩2.73 trillion for Binance and approximately ₩1.12 trillion for Bybit in the year 2025.
The data also reveals that the number of Korean accounts holding substantial balances overseas has doubled year-over-year. A portion of this capital has also been allocated to self-custody wallets, illustrating a trend where users diversify their investments between exchanges and personal wallets.
Authorities emphasize that cross-border transactions carry certain risks. Regulators are increasingly focusing on anti-money laundering measures and establishing partnerships with financial institutions for cryptocurrency firms. Conversely, traders are advocating for greater access to advanced trading options such as margin trading and derivatives, which remain unavailable in the domestic market. This ongoing tension between accessibility and regulatory oversight is crucial to understanding the recent fund migrations.
Persistent Demand Signals Continued Interest
Trend analyses depict that while Korean interest in cryptocurrency persists, it has merely shifted to different platforms. Local exchanges still experience significant spot trading, yet overall interest now primarily flows to international markets rather than diminishing. The reported $110 billion primarily reflects the transfer and redeployment of assets, showcasing that value remains intact.
Current discussions among Seoul lawmakers suggest efforts towards establishing more comprehensive regulations, including provisions for stablecoins that many in the industry have advocated for. Should new legislation be enacted, reopening markets to a more extensive range of services might encourage some capital to return to domestic exchanges. For the time being, a significant portion of users continues to trade abroad in pursuit of diverse options and tools.
Featured image from Unsplash, chart data from TradingView
