South Korean crypto market grows to $45.9B in 2021 despite strict regulations

South Korea’s crypto marketplace grew to 55 trillion Won ($45.9 billion) by the extremity of 2021, arsenic per a caller survey from the country’s main fiscal regulator, the Financial Service Commission.

South Korea is considered among the strictest crypto markets successful presumption of regulatory argumentation implementations and made regular headlines passim 2021 for its caller question regularisation and Know Your Company requirements. However, the Korean crypto marketplace has bloomed to caller heights contempt the regulatory scrutiny successful 2021.

The FSC analyzed transaction information from the 24 licensed crypto exchanges and revealed that regular transactions connected Korean crypto exchanges reached 11.3 trillion won ($9.4 billion). The combined operating nett of 24 businesses came to 3.37 trillion won ($2.8 billion). A full of 9 crypto exchanges reported a nett nonaccomplishment implicit the past year.

The crypto trading marketplace was dominated by nationalist fiat Korean-won which accounted for 95% of the full crypto transactions which chiefly came from Upbit, Bithumb, Coinone and Korbit.

The domination of won successful the Korean crypto marketplace is attributed to a caller crypto licence regularisation issued successful 2021, that required crypto exchanges to open real-name slope accounts of traders successful relation with a certified bank. The peculiar regulations forced astir 200 tiny and mean crypto exchanges retired of concern arsenic banks refused to spouse oregon connection immoderate of their services.

Related: Korea’s crypto marketplace is among the strongest — and the strangest — successful the world

The FSC study published by The Korea Herald suggests determination are a full of 15.3 cardinal registered crypto speech users, retired of which lone 5.58 cardinal radical participated successful trading successful 2021. Out of these 5.58 cardinal crypto users, astir 3.1 cardinal users clasp crypto assets worthy beneath 1 cardinal won ($850), portion 15% of the traders clasp virtual assets implicit 10 cardinal won ($8,500).

South Korea’s crypto licence regulations wiped the bulk of the mean and tiny exchanges retired of the state and those who survived had to adhere to strict privateness laws, banning transactions from the backstage wallets and flagging transactions supra a definite amount. Another proposal was issued successful November for token issuers aimed astatine recovering illegally gained funds, doling retired transgression punishments, and protecting investors from aboriginal malfeasance.

Another proposal was issued successful November for token issuers aimed astatine recovering illegally gained funds, doling retired transgression punishments, and protecting investors from aboriginal malfeasance.

By the last 4th of 2021, the Korean regulators absorption shifted towards crypto taxation, with a connection to enforce a 20% taxation connected crypto profits. However, successful lack of wide regulations for the market, the taxation argumentation was delayed for different year.

The state has besides shifted its absorption connected nonfungible tokens successful the caller past and mightiness go 1 of the archetypal nations to contented NFT taxation regulations.