🌎 South Korea Crypto Exchange Market Shrinks

South Korean Crypto Exchange Market Shrinks Amid Regulatory Hurdles

A recent report from the Financial Intelligence Unit (FIU) has revealed a decline in the number of registered virtual asset service providers in South Korea. As of the report’s release, only 31 crypto trading firms remain registered in the country, a drop of over 26% from 42 last year.

Regulatory Compliance and Banking Access Remain Key Challenges

TheFIU report highlights that most of the exchanges that exited the Korean market were token-only platforms without fiat support. These platforms faced significant difficulties in staying in business due to their inability to offer fiat trading options, such as the U.S. dollar or Korean won.

Additionally, many token-only exchanges failed to renew their registrations, leading to their exclusion from the nation’s registry. Without real-name bank accounts, these platforms struggled to attract users and ultimately shut down.

Key Factors Contributing to the Decline

The FIU report identifies several key factors contributing to the decline of token-only exchanges in South Korea:

Lack of fiat trading options, making it difficult to attract users
Failure to renew registrations, resulting in exclusion from the nation’s registry
Complete capital erosion, with over 90% of token-only exchanges affected last year

Future Outlook for the South Korean Crypto Exchange Market

The report warns that the number of crypto exchanges in South Korea may drop further, as some firms still on the list have announced plans to exit, while others are shifting their focus to overseas markets due to regulatory uncertainty.

Some of the notable exchanges that have exited the Korean market include GDAC, ProBit, Huobi Korea, and Bitrade. The delisting of these exchanges has reduced the overall number of registered crypto trading firms in the country.