Crypto Exodus: Why $60 Billion Just Fled From South Korea
South Korea’s Financial Services Commission (FSC) has flagged huge crypto outflows to abroad exchanges amidst more durable oversight from regulators.
Inside The South Korean Crypto Report
Around $60 billion (₩90 trillion) value of crypto belongings had been moved out to international exchanges and personal wallets in the course of the second half of 2025, a Wednesday report from the country’s top financial regulator revealed. This represents a 14% enhance in comparison with the primary quarter of the yr, which noticed a $52.2 billion (₩78.9 trillion) outflow.
However, the quantity subjected to the Travel Rule (outgoing transactions of ₩1 million or extra per transaction by a registered enterprise operator) decreased in a 23%, going from ₩20.2 trillion within the first half of the yr to ₩15.6 trillion within the second half.
At the identical time, pockets and custody platforms noticed a modest uptick in person numbers (779, 20 greater than these on the finish of June 2025), however the worth of belongings they maintain dropped sharply, partly as a result of benchmark costs for a number of custodied tokens have fallen.
The variety of accounts on South Korean crypto exchanges hit 11.1 million, a 3% enhance from June 2025, whereas buyer deposits jumped a lot quicker, surging 31% to about $5.4 billion (₩8.1 trillion). But even with such an enlargement, exchanges didn’t find yourself making more cash. The 18 platforms nonetheless in operation booked roughly $253.4 million (₩380.7 billion) in working revenue for the second half, a 38% drop from the round $411.2 million (₩617.8 billion) they earned within the first six months.
South Korea Tightens The Crypto Leash: A Recap
This crypto exodus doesn’t essentially come as a shock within the mild of the newest strikes from South Korean regulators, which clearly paint them in crackdown colours. As covered by Bitcoinist earlier this month, the National Tax Service (NTS) introduced they’re transferring forward with an AI-driven system to trace crypto funding positive factors as they put together to begin taxing digital asset income from January 2027. Authorities have additionally toughen oversight on main crypto exchanges, with Korean giants such as Korbit, Upbit and most recently Bithumb dealing with penalties and suspensions attributable to AML and KYC violations.
But that’s not all: last February, authorities signed a new cooperation agreement between the Financial Intelligence Unit (FIU) and nine major credit card companies, working alongside the customs service, to trace and block card-based funds tied to unlawful abroad crypto foreign-exchange schemes and cross-border fund outflows. Under the deal, officers will mix card-usage information with immigration information to flag suspicious patterns and minimize off channels generally used to maneuver cash into unregistered offshore exchanges. This sits on top of the FIU’s broader 2026 AML agenda, which incorporates increasing the Travel Rule to smaller transactions and tightening oversight of digital asset service suppliers.
All factors to Seoul eager to stem capital flight and cash laundering with out killing Korea’s place as a significant crypto hub, particularly as additionally they transfer to normalize institutional and company participation. Tighter AML and cross‑border controls might scale back some offshore liquidity and arbitrage, however may additionally push subtle capital into extra opaque channels or DeFi rails.
Cover picture from Perplexity, BTCUSD chart from Tradingview
