Digital asset platforms in South Korea have shut down, resulting in greater market concentration. Get updates on recent exchange closures, regulatory and environmental compliance, and user asset protection. Korean users can choose global compliant platforms like Gate to trade cryptocurrencies.
Exchange to Cease Operations
A South Korean cryptocurrency exchange announced it will end operations on January 29, 2024. The exchange stated that this decision responds to what it describes as a challenging business environment.
The exchange confirmed it will continue supporting user asset withdrawals. The closure notice, published on the exchange’s website, identified the challenging business climate as the reason for shutting down. With this move, the exchange joins other South Korean platforms, including Cashierest and Coinbit, both of which closed in November. CoreDAX, another platform, suspended trading services due to financial difficulties.
Previously, the exchange restricted certain services and was updating its brand and systems to enhance service quality. In its statement, the exchange noted:
"We sincerely thank all customers who have used our services. For our long-term loyal clients, we regret and are disappointed that we are unable to continue offering virtual asset trading services."
In January 2023, the platform severed ties with its original affiliated platform. Chairman Jo Gukbong acquired the majority stake previously held by founder Lee Lin. The exchange planned a rebrand and name change while continuing to provide cryptocurrency trading services.
Increasing Market Concentration
Currently, a handful of major players dominate South Korea’s cryptocurrency market. According to the Financial Services Commission, as of June 2023, the nation’s top five exchanges—Upbit, Bithumb, Coinone, Korbit, and Gopax—handled 99.6% of all domestic crypto trading volume. South Korea enforces a strict regulatory framework, established through 2021 amendments to the Financial Reporting Act.
The law requires domestic crypto trading platforms to maintain partnerships with local banks for fiat-to-crypto services. These stringent rules are designed to minimize risks of money laundering and market manipulation. However, this exchange and other smaller platforms failed to secure banking partnerships, restricting them to crypto-to-crypto services only.
Virtual Asset Investor Protection Act
The Virtual Asset Investor Protection Act took effect in July 2024. This law places additional obligations on crypto exchanges to safeguard client assets. Under the legislation, exchanges must hold at least 80% of user funds or equivalent assets in cold wallets. They are also required to secure insurance coverage to guarantee user compensation in the event of hacking or system failures.
These new rules reflect South Korea’s trend toward tighter crypto regulation, aiming to protect investors and maintain market stability. Smaller exchanges that cannot meet these increasing regulatory demands are exiting the market, further intensifying market concentration.
FAQ
Which Crypto Exchanges Are Available in South Korea?
South Korean users can access a range of leading international crypto exchanges, including Binance, Coinbase, and Gate.com, among other global platforms. These exchanges support Korean won trading pairs, offer a broad selection of tokens, and provide strong liquidity to meet diverse investor needs.
Is Cryptocurrency Banned in South Korea?
Cryptocurrency is not banned in South Korea. The government regulates the sector, requiring exchanges to obtain licenses and comply with anti-money laundering regulations. Crypto trading is legal, but exchanges must meet all applicable regulatory standards.
Binance no longer provides services to South Korean users. Local users seeking to trade cryptocurrency should consider other international exchanges or compliant domestic platforms.
* The information is not intended to be and does not constitute financial advice or any other recommendation of any sort offered or endorsed by Gate.
