South Korean crypto holdings fell by half as investors shifted capital toward domestic stock markets and stablecoins.
Crypto News
The value of cryptocurrency held by South Korean investors fell to 60.6 trillion won ($41.4 billion) by the end of February 2026, down from 121.8 trillion won ($83.3 billion) at the end of January 2025, The Chosun Daily reported on May 5, citing figures the Bank of Korea submitted to Rep. Cha Gyu-geun of the Rebuilding Korea Party.
The decline reflects a combination of falling crypto asset prices and a shift of capital into domestic equity markets. Daily trading volumes across the country's five major exchanges, Upbit, Bithumb, Korbit, Coinone, and Gopax, fell to $3 billion in February 2026 from $11.6 billion in December 2024. Won deposits held at exchanges, a measure of available investor dry powder, dropped to 7.8 trillion won ($5.3 billion) from 10.7 trillion won ($7.3 billion) at the end of 2024.
Stablecoins moved against the broader trend. Holdings climbed to $597 million in December 2025 from $60 million in July 2024. They eased to $41 million by February 2026, a decline far smaller in relative terms than the drop seen across the wider crypto market.
Tighter AML Rules Add Pressure
South Korean financial authorities plan to implement revised Anti-Money Laundering (AML) rules in August 2026. Under the proposal, crypto transactions above 10 million won (around $6,840) involving overseas exchanges or private wallets would be automatically flagged as suspicious. Industry body DAXA has opposed the measure, arguing it is disproportionate and could push domestic users toward offshore platforms. #AML #CryptoRegulation
DAXA said the rule could increase suspicious transaction reports from the country's five largest exchanges by 85 times, rising to over 5.4 million cases annually from approximately 63,000 last year. The body said that volume would make practical compliance unworkable. A separate policy debate over a planned 22% capital gains tax on crypto is also intensifying.
South Korea's Finance Ministry confirmed on May 8 that the 22% tax will take effect as scheduled on Jan. 1, 2027. Samsung SDS has separately won a contract to build and operate a blockchain-based securities platform for the Korea Securities Depository (KSD), with completion targeted for February 2027. The project forms part of the country's broader push to develop tokenized asset market infrastructure ahead of a new legal framework taking effect in early 2027.
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