South Korea’s cryptocurrency market showed a sharp rise in capital moving offshore in the second half of 2025, even as user participation and deposits continued to grow domestically. New data released by the Financial Services Commission (FSC) points to a widening gap between user activity and exchange performance.
Crypto outflows from local exchanges reached 90 trillion won, or about $60 billion, during the period. The number was 14% higher than the 78.9 trillion won it was in the first half of the year. The regulator linked part of the movement to cross-border trading strategies and the use of private wallets.
“It is presumed that virtual assets are being transferred abroad for arbitrage and other similar activities.”
The FSC report identified overseas platforms and private wallets as primary destinations for these transfers, based on submitted data from domestic operators.
User growth continues despite weaker market conditions
The number of crypto exchange accounts in South Korea rose to 11.1 million by the end of 2025. The number is 3% higher than it was in June. Growth in deposits outpaced account expansion. Customer holdings climbed 31% to 8.1 trillion won, around $5.4 billion, over the same period.
The figures show continued retail participation in the market. A large share of users held relatively small balances. More than 8.2 million accounts contained less than 1 million won.
The increase in deposits did not translate into stronger financial performance for exchanges. The country’s 18 active trading platforms reported operating profits of 380.7 billion won, or $253.4 million, in the second half. That total fell 38% from 617.8 billion won in the first half.
Trading activity and valuations move lower
Average daily trading volume declined to 5.4 trillion won, or $3.6 billion. The drop is 15% lower than it was in the first half of 2025. Market capitalization also moved lower during the same period.
The FSC estimated the total value of South Korea’s crypto market at 87.2 trillion won, or approximately $58 billion, by year-end. The number is 8% lower than the last half.
The downturn followed a broader cooling in digital asset prices after peaks earlier in the year. The market remained below its October 2025 high, when bitcoin reached about $126,080.
Data from the Financial Intelligence Unit and the Financial Supervisory Service confirmed similar trends. Their joint survey of 27 virtual asset service providers showed increases in user accounts and deposits alongside declines in trading volume, operating profit, and market capitalization.
External transfers and compliance shifts
The volume of virtual assets transferred outside exchanges increased during the second half. Transfers to overseas operators and private wallets under whitelist arrangements rose by 13%. At the same time, transactions subject to the Travel Rule declined by 23%.
Authorities collected the figures from business submissions. The FSC noted that the results reflect compiled operational data rather than government-approved statistics.
Wallet and custody providers showed mixed results. The number of active accounts rose slightly, but total assets under custody dropped by 58%. The decline followed price changes in certain custodial assets.
Tax enforcement push
Separate reporting on March 13 outlined a parallel effort to strengthen oversight of digital asset activity. South Korea’s National Tax Service (NTS) opened a procurement process to build a system designed to track cryptocurrency transactions and detect tax evasion, as HodlFM reported.
The system will rely on artificial intelligence and machine learning to identify unusual transaction patterns. The NTS plans to share findings with agencies such as the Korea Customs Service and the Bank of Korea when investigations require coordination.
Officials aim to complete development and testing through 2026, with a pilot scheduled for November and full deployment expected by year-end. The timeline aligns with the planned introduction of cryptocurrency taxation in January 2027.
Policy direction takes shape amid market shifts
South Korea approved its crypto tax framework in 2020 but delayed implementation several times. The current plan sets a 22% tax on annual crypto gains above 2.5 million won.
The combination of rising offshore flows, declining exchange profits, and new enforcement tools outlines the direction of the country’s crypto market. User participation remains steady, yet capital mobility and regulatory oversight continue to reshape how the market operates.
Oleksii Shumak
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