$110B Crypto Exodus Exposes Flaws in South Korea’s Rules

• Korean investors shifted about $110 billion offshore in 2025 without reducing trading.
• Offshore exchanges earned far more from Korean traders than South Korea’s top platforms.
• Spot-only rules and delayed laws pushed Korean demand toward offshore futures trading.

More than ₩160 trillion, about $110 billion, left South Korea’s crypto exchanges in 2025, according to CoinGecko and Tiger Research. The transfers moved from domestic platforms to overseas exchanges, mainly Binance and Bybit, during the year. The shift involved millions of Korean investors, unfolded nationwide, and stemmed from strict local trading limits and delayed regulation.

Capital Flight Shows Regulatory Gaps

As per the Research, South Korean investors sent roughly ₩160 trillion to foreign exchanges during 2025. Notably, this outflow nearly tripled compared with 2023 levels. Between January and September alone, about ₩124 trillion moved offshore, showing acceleration as global crypto volumes recovered.

South Korea remains one of Asia’s most active crypto markets. More than 10 million people trade digital assets, roughly 20% of the population. However, domestic exchanges operate under rules that largely restrict activity to spot trading. As demand for derivatives and leverage grew, investors increasingly looked elsewhere.

The Digital Asset Basic Act, designed to address market structure and issuance rules, faced delays in December. Regulators disagreed over stablecoin oversight, leaving the framework incomplete. Meanwhile, the Virtual Asset User Protection Act, active since 2024, focuses on custody and fraud prevention, not trading mechanics.

As a result, domestic platforms lack clarity to expand products. However, foreign exchanges offer futures, leverage, and broader listings. According to the report, this imbalance pushed capital outward rather than reducing overall crypto participation.

Offshore Platforms Capture Korean Trading Demand

Foreign exchanges absorbed most of the redirected activity. The report estimates that Korean users generated ₩2.73 trillion in fees at Binance during 2025. Bybit followed with ₩1.12 trillion, while OKX, Bitget, and Huobi earned smaller amounts. Combined, these platforms made about ₩4.77 trillion from Korean traders.

That figure equals roughly 2.7 times the combined operating revenue of South Korea’s five largest exchanges. Upbit, Bithumb, Coinone, Korbit, and Gopax together earned about ₩1.78 trillion last year. Consequently, fee income increasingly flows outside the domestic market.

CoinGecko said Korean won trading volumes often rival the U.S. dollar globally. This position remains unusual for a single national currency. However, trading location now matters more than participation levels. Korean investors continue trading actively, but many do so offshore.

Aju Press reported in November that the number of Koreans holding large overseas exchange accounts more than doubled in one year. The trend reflected both market recovery and frustration with local limits. Notably, foreign platforms list futures faster and offer pre-market trading before token generation events.

Related: South Korea’s Crypto Whales Surge Past 10,000 Investors

Domestic Constraints and Growing Alternatives

Local exchanges are also under growing pressure from regulators. In March 2025, South Korea’s Financial Intelligence Unit inspected Bithumb and flagged problems with anti-money laundering and customer verification rules. 

Regulators could issue fines similar to the $25 million penalty previously given to Upbit. These checks raised operating costs for exchanges but did not allow them to offer more services. Meanwhile, many investors are looking beyond centralized exchanges. 

CoinGecko reported that about ₩2.7 trillion was moved from exchanges into personal wallets like MetaMask in the first half of 2025. This happened even as licensed exchanges faced tighter rules.

Decentralized perpetual futures platforms have also become more popular. As per CoinGecko, Perp DEXs reached record volumes with improved speed and liquidity. Korean investors increasingly used these platforms when centralized options lacked leverage or derivatives.

The report explained its methodology using exchange records, Arkham Intelligence, and Dune. One estimate relied on Korean traders representing 13% of Binance volume in 2023, mostly futures. Another tracked actual fund flows, adjusting for trading frequency and leverage.

Both methods produced similar results. They showed heavy Korean participation in offshore derivatives trading. Still, local regulations block everyday investors from using these products at home, keeping the gap in place.

South Korea’s crypto market is still big and very active, with many retail traders and heavy trading volume. But tight product restrictions, slow-moving laws, and inconsistent enforcement continue to shape where people trade. According to CoinGecko and Tiger Research, these issues help explain why about ₩160 trillion moved out of the country in 2025.

Data from CoinGecko, Tiger Research, and Aju Press shows that Korean investors did not leave crypto altogether. Instead, they moved their trading activity overseas because of limited products and delayed regulations. As a result, capital, trading volume, and fee revenue increasingly sit outside South Korea.