South Korea's cryptocurrency market faces a downturn, with a significant decrease in the number of registered exchanges.
Reduction in Number of Exchanges
According to a report by South Korea’s Financial Intelligence Unit (FIU), the number of registered crypto trading firms has fallen to 31, a 26% decrease from 42 last year.
Financial Struggles
Token-only exchanges, which do not support real-name bank accounts or fiat trading, have been hit hardest. These exchanges struggle to attract users and maintain liquidity. Over 90% of these exchanges suffered total capital erosion in 2023, leading to the closure of several, including Qubit and Coinbit. Additional delisted exchanges include GDAC, ProBit, Huobi Korea, and Bitrade.
Future Changes and Regulation
Regulatory compliance challenges have also driven the market decline. The government’s firm stance on compliance has accelerated this trend. Looking forward, the FIU predicts further market shrinkage as some firms plan to exit or move operations overseas due to regulatory uncertainty.
Amid economic and regulatory challenges, South Korea's cryptocurrency market faces significant changes. Discussions on revising the regulatory framework for stablecoins and exchange operations are underway.
