Korean Crypto Market Loses $24B in Six Months as Trading Volume Collapses – What’s Going on?

South Korean crypto market has shed approximately $24 billion in six months, with domestic crypto holdings plummeting from KRW 121.8 trillion to KRW 89.2 trillion between January and June 2025, according to the Bank of Korea’s latest Financial Stability ￰1￱ massive outflow coincided with a dramatic collapse in trading activity, as daily volumes crashed from KRW 17.1 trillion in December 2024 to just KRW 3.2 trillion by June.). The nation’s 10.86 million active trading accounts represent roughly 20% of the total population.) per ￰2￱ adopters typically began with Bitcoin before diversifying into altcoins and stablecoins, with 60% starting during the 2020 bull ￰3￱ Pushes Pro-Crypto Agenda Despite Market Decline President Lee Jae-myung’s administration has launched comprehensive crypto-friendly reforms , reclassifying trading firms as “ venture companies ” to grant them access to tax incentives and state-backed financing that was previously denied since ￰4￱ Ministry of SMEs and Startups proposed amendments to include Virtual Asset Service Providers under the category of venture ￰5￱ regulators lifted restrictions on institutional crypto investments while preparing approval frameworks for Korea’s first spot crypto ￰6￱ Korea is moving to reclassify crypto firms as “venture companies,” which would grant access to government subsidies. #SouthKorea #Crypto ￰0￱ — ￰7￱ (@cryptonews) July 9, 2025 The Financial Services Commission also presented implementation measures scheduled for late 2025 , alongside regulatory frameworks for won-based ￰8￱ banks established dedicated crypto teams in anticipation of legislative ￰9￱ Bank launched a nine-member Digital Asset Team, while Kookmin Bank created a Digital Asset Response Council covering KB Financial Group affiliates.

Similarly, Shinhan Bank formed a 20-employee crypto task force as institutions prepare rapid market entry ￰10￱ governments simultaneously intensified crypto tax collection ￰11￱ to a recent Cryptonews report, Cheongju City has seized tokens from 203 residents since 2021 for unpaid taxes and has opened its own trading account to directly liquidate confiscated ￰12￱ city collected 1.5 billion won ($1.1 million) from 161 tax evaders through crypto ￰13￱ Democratic Party’s crypto policy task force pledged to streamline regulations away from operator restrictions toward industry ￰14￱ force leaders plan consultations with regulators, the Bank of Korea, and private sector experts to develop comprehensive digital asset legislation.