In a remarkable shift within the crypto landscape, approximately $110 billion — equivalent to ₩160 trillion — migrated from South Korean exchanges to overseas platforms in 2025. This significant exodus highlights the desire among South Korean investors for more diverse trading opportunities that domestic markets currently struggle to provide.
According to recent research, local regulations have largely constrained domestic exchanges to spot trading, stifling the growth of more complex products like derivatives and margin trading. As a result, many traders have opted to utilize foreign exchanges such as Binance and Bybit, which offer a wider array of tools and options. The pivotal figures come from a joint study conducted by CoinGecko and Tiger Research.
Regulatory Constraints Drive Outflows
Reports suggest that the restrictive regulatory environment in South Korea has been a significant driver of these outflows. While laws like the Virtual Asset User Protection Act were established to safeguard investors, traders claim that the regulations have not yet created a comprehensive framework that fully supports innovative market services.
This regulatory gap has contributed to a notable trend: an increasing amount of South Korean-held crypto is now being stored in foreign wallets and on international exchanges. The ongoing discussions surrounding the Digital Asset Basic Act have also faced delays, leaving investors feeling underserved and eager for more robust opportunities.
Impact of Fees and Behavior Patterns
These trends are reflected in the fees generated by South Korean users on overseas platforms. Industry estimates indicate that user-based fee revenue reached about ₩2.73 trillion for Binance and approximately ₩1.12 trillion for Bybit in 2025. Furthermore, it has been reported that the number of South Korean accounts holding substantial balances overseas has more than doubled since the previous year.
In addition to transferring funds to international exchanges, some South Koreans have also allocated capital into self-custody wallets. This diversification illustrates a growing preference for controlling personal assets while still maintaining access to trading opportunities abroad.
Demand for Trading Remains Robust
While some regulators express concerns regarding the risks associated with cross-border money transfers, traders are increasingly vocal about their need for access to advanced trading products. Many are pushing for margin trading and derivatives, which remain largely unavailable in South Korea due to stringent regulations.
Intriguingly, the overall trading volume in South Korea suggests that investor interest in crypto is far from waning. Although domestic platforms continue to facilitate significant spot trading activity, the broader demand appears to have simply relocated to international exchanges rather than diminished. The reported $110 billion represents funds that have been transferred, indicating a strategic movement rather than a loss of value.
In light of these developments, lawmakers in Seoul are said to be contemplating the introduction of more inclusive regulations, potentially addressing the burgeoning demand for stablecoin provisions among industry stakeholders. If new laws are enacted that expand the range of available services, we could see some of those fleeing funds returning to South Korean markets.
For now, however, many traders are content to explore the enhanced offerings of overseas exchanges, eager to seize the expanded possibilities they provide.
Featured image from Unsplash.
