The value of cryptocurrency held by South Korean investors has more than halved over the past year, falling from 121.8 trillion won ($83.3 billion) at the end of January 2025 to 60.6 trillion won ($41.4 billion) by late February 2026, according to data submitted by the Bank of Korea to lawmaker Cha Gyu-geun. Trading activity across the country’s five largest exchanges—Upbit, Bithumb, Korbit, Coinone, and Gopax—has weakened substantially, with daily volume dropping to $3 billion in February from $11.6 billion in December 2024. Won deposits held at these exchanges, often seen as dry powder for future trades, also fell from 10.7 trillion won at the end of 2024 to 7.8 trillion won.
The decline reflects a combination of lower crypto prices and a migration of capital into South Korea’s stock market and, increasingly, into real estate. Data from the Ministry of Land, Infrastructure and Transport shows that between February 10 and March 31, 324 homebuyers declared using proceeds from cryptocurrency sales in their home finance plans. Investors aged 30–39 accounted for about 70.7% of these buyers, with total crypto-derived funds used for home purchases reaching roughly 10.31 billion won ($7.4 million). While this sum represents only about 0.1% of total home purchase financing, it signals a nascent trend of crypto gains flowing into property. The contraction in exchange deposits suggests not just mark-to-market losses but reduced conviction in near-term upside, as investors keep less cash ready to deploy on trading platforms.
Stablecoins were a notable exception: holdings surged from $60 million in July 2024 to a peak of $597 million in December before retreating to $41 million in February, indicating ongoing demand for dollar-linked crypto liquidity even as broader holdings fell. Amid this backdrop, financial authorities are preparing stricter anti-money laundering rules set to take effect in August, which would automatically flag crypto transactions above 10 million won involving overseas exchanges or private wallets. Industry body DAXA warns the changes could increase suspicious transaction reports 85-fold—from about 63,000 last year to over 5.4 million—potentially driving users to offshore platforms like Binance and raising compliance costs for local exchanges.
Adding to the uncertainty, South Korea’s long-delayed 22% crypto gains tax is now confirmed to begin on January 1, 2027. Meanwhile, the country is advancing regulated infrastructure for tokenized assets; Samsung SDS has secured a contract to build a blockchain-based securities platform for the Korea Securities Depository, with completion expected by February 2027. The overall picture is one of a shrinking retail crypto market facing tighter rules, while institutional-grade tokenization moves forward.
