South Korea Crypto Market Holdings Fall by 50%

The South Korean crypto market saw its holdings fall by more than 50% over the course of one year
The number of investments in stablecoins rose while other cryptocurrencies saw a decline
The South Korean government will be implementing strict AML laws and a crypto tax of 22% starting from 2027

The South Korean crypto market witnessed a plunge in cryptocurrency holdings over the last year due to reduced trading volume. According to figures recently published by the Bank of Korea, investor balances stood at 121.8 trillion won in January 2025; they fell to 60.6 trillion won by February 2026.

The figures covered investor assets held on the country’s five major cryptocurrency exchanges, including Upbit, Bithumb, Korbit, Coinone, and Gopax. Reports linked the decline to falling cryptocurrency prices, reduced trading activity, and stronger interest in stock markets during the same period.

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Moreover, average daily trading volumes across the five exchanges also moved lower. The total trade value reportedly fell to $3 billion in February 2026, down from $11.6 billion reported in December 2024. On the other hand, the deposit volume reportedly reduced from 10.7 trillion won in the last month of 2024 to 7.8 trillion won in February 2026 due to lower investments in the South Korean crypto market.

Stablecoin Demand Exceeded Market Projections

Unlike the broader market, demand for stablecoins showed some volatility. According to The Chosun Daily, the balance in stablecoin wallets increased from about $60 million in July 2024 to nearly $597 million in December, then fell back to $41 million in February 2026.

Nevertheless, demand for stablecoins increased even as the overall crypto market fell. The increase in demand for stablecoins was mainly due to exchange rates and other factors. According to a report in The Chosin Daily, the Korean won fell against the US dollar. The exchange rate reportedly moved from around 1,224 won per dollar in January 2023 to about 1,511 won per dollar by March this year.

Other experts mentioned in the reports attributed the drop in crypto investments to better performance in domestic and global stock markets. Based on the data presented, investors’ funds were directed towards equity trading owing to falling crypto asset prices.

South Korea To Implement Tougher AML Rules For Crypto Investments

The decrease in the South Korean crypto market occurs amid regulatory moves to tighten rules on money laundering related to crypto investments. Under the proposed framework, crypto transactions above 10 million won involving overseas platforms or private wallets would be automatically classified as suspicious.

Industry body DAXA criticized the proposal, arguing that the new reporting rules could create operational difficulties for domestic exchanges.

According to the organization, suspicious transaction reports submitted by the country’s five largest exchanges could increase from approximately 63,000 cases last year to more than 5.4 million cases under the proposed framework. DAXA also stated that stricter domestic rules could prompt some users to shift their trading activity to offshore exchanges, including Binance.

Debate Continues Over Planned 2027 Crypto Tax

South Korea’s planned cryptocurrency tax has also remained a major topic across the local industry. According to the information provided, the Finance Ministry confirmed that a 22% tax on crypto gains is still scheduled to take effect on Jan. 1, 2027.

The confirmation marked the first time authorities publicly stated that the planned tax would proceed as scheduled. This is despite ongoing efforts to regulate trading and crypto transactions.

Causes of the South Korean Crypto Market Fall

There are several reasons why the South Korean crypto market experienced a fall:

Lower prices of cryptocurrencies decreased the total number of crypto holdings
Crypto trading volumes fell in local exchanges
Traders started focusing on stock trading
A rise in the demand for stablecoins amid currency pressure
Deposits at exchanges declined due to reduced market activity

According to recent figures, overall domestic crypto market activity has decreased.

Conclusion

The South Korean crypto market recorded a significant decline over the past year, as investor holdings, trading volumes, and exchange deposits declined across the country’s largest exchanges. At the same time, regulators continued preparing stricter AML rules while confirming plans to implement a 22% crypto tax in 2027.