In 2025, 160 trillion Korean won of South Korea's cryptocurrency funds flowed out... The '脱 Korea' move to overseas exchanges officially begins

Source: TokenPost Original Title: 2025 South Korea Cryptocurrency Funds Outflow of 160 Trillion Won… “De-Koreaning” to Overseas Exchanges Original Link:

160 trillion won outflow… South Korea’s cryptocurrency funds migrate overseas in 2025

In 2025, approximately 160 trillion Korean won (about $1.446 billion) of cryptocurrency funds will flow from domestic exchanges to overseas platforms. Investment activities have not ceased; market participants are simply shifting trading to overseas platforms that offer more diverse financial products and features.

According to public reports, the main reason for this capital outflow is South Korea’s cryptocurrency regulations. Current regulations only permit domestic exchanges to conduct “spot trading,” preventing investors from using margin trading or derivatives and other complex investment tools. Ultimately, investors have chosen overseas exchanges such as a leading exchange and another exchange that provide diversified functionalities.

This data comes from a joint report by CoinGecko and Tiger Research. Both organizations analyze that domestic regulations only allow exchanges to offer “semi-finished services,” leading to $110 billion (about 160 trillion Korean won) of assets flowing overseas in 2025.

Regulation and Banking System, Changing Investor Choices

The “Virtual Asset User Protection Act” introduced in 2024, though implemented in the name of user protection, actually further narrows the scope of services that exchanges can provide. Although the domestic parliament discussed the drafting of the “Digital Asset Basic Law,” delays in legislative processing prevented it from meeting investor needs.

As a result, investors’ cryptocurrencies are not only flowing to overseas platforms but also dispersing into personal asset wallets (self-custody wallets). This indicates that funds are not disappearing but are “transferring” abroad. The report shows that the number of overseas exchange users with Korean accounts has more than doubled year-over-year.

High Fee Revenue Reflects Overseas Exchanges’ Dependence on the Korean Market

In 2025, Korean users paid a substantial amount in fees to overseas exchanges. It is estimated that a leading exchange earned about 2.73 trillion Korean won (approximately $18.9 million), and another exchange earned about 1.12 trillion Korean won (approximately $7.8 million). This indicates that competition among overseas exchanges for Korean users is becoming increasingly fierce.

Regulators warn that cross-border capital flows may increase financial risks such as money laundering, thus strengthening AML (Anti-Money Laundering) systems and promoting cooperation with banks. However, investors still prioritize diversified investment tools and earning opportunities, continuing to prefer more open overseas platforms than domestic ones.

Broken Balance Between Regulation and Service… Government Response Becomes Key

The overall cryptocurrency market size is approximately $3.08 trillion, remaining active, and interest from Korean investors has not waned. The only change is in the “venue” of trading. Domestic exchanges remain active, but demand in areas restricted by regulation is flowing overseas.

Therefore, Seoul is preparing to introduce a more comprehensive digital asset law, including stablecoin regulations. If the regulatory environment improves to allow diversified financial services, some funds may flow back domestically.

Currently, many investors are implementing their strategies using overseas exchanges or wallets, and this trend is unlikely to be easily reversed in the market.

Market Analysis

The outflow of 160 trillion Korean won reflects a conflict between regulation and accessibility, indicating a “demand loss” in South Korea’s cryptocurrency market. This is not a short-term phenomenon; without institutional improvements, it could become a long-term issue.

Strategic Highlights

Focus on changes in domestic regulation while monitoring usage and revenue indicators of overseas exchanges. Whether investors accept regulatory risks or adopt conservative, compliant approaches depends on their judgment.

Terminology Explanation

• Spot Trading: Basic trading method of buying and selling cryptocurrencies instantly
• Self-Custody Wallet: Personal wallet where users directly hold their cryptocurrencies
• AML (Anti-Money Laundering): Regulatory system to prevent illegal fund tracing
• CEX (Centralized Exchange): Trading platform operated by a company