Surge in Korean Won Trading
The South Korean won has become the leading currency for cryptocurrency trading worldwide in the first quarter of 2024. According to Kaiko, the total trading volume in Korean won reached $456 billion, surpassing the $445 billion traded in US dollars.
This surge is attributed to the growing demand for “risky crypto assets” in South Korea and fierce competition among local digital currency exchanges. Smaller exchanges like Bithumb and Korbit have offered zero-fee promotions to attract traders, challenging Upbit’s dominance in the local spot trading market.
South Korea’s Crypto Risk Appetite
South Korea stands out in the crypto sector with its preference for smaller and more volatile altcoins over major cryptocurrencies like Bitcoin and Ether. On average, trades involving altcoins account for over 80% of all activity in South Korea.
Regulatory Landscape
South Korea’s approach to digital currency regulation is complex. While the country has shown interest in the crypto sector, it has also implemented strict measures to prevent illegal activities. The ongoing legal proceedings against Do Kwon, the founder of TerraForm Labs, demonstrate the government’s commitment to enforcing compliance.
International Collaboration
South Korea’s Financial Supervisory Service (FSS) is scheduled to meet with the US Securities and Exchange Commission (SEC) in May to discuss the classification of NFTs and the approval of spot Bitcoin ETFs. Both countries are considering recognizing NFTs as virtual assets.
Exchange Regulations
South Korea has tightened regulations on its crypto exchanges, requiring them to maintain a minimum reserve of 3 billion won ($2.3 million).
