The 24 regulated crypto exchanges had a daily transaction volume of about $9.4 billion on average.
According to a new report from South Korea’s primary financial regulator, the Financial Service Commission, the country’s crypto market rose to 55 trillion Won ($45.9 billion) by the end of 2021.
South Korea is one of the tightest crypto marketplaces in terms of regulatory policy execution, and its new travel rule and Know Your Company requirements generated regular news during 2021. Despite the regulatory monitoring in 2021, the Korean crypto industry has risen to unprecedented heights.
The FSC studied transaction data from 24 licenced cryptocurrency exchanges and discovered that daily crypto exchange transactions in Korea were 11.3 trillion won ($9.4 billion). A total of 3.37 trillion won ($2.8 billion) was generated by 24 firms. Over the last year, nine crypto exchanges have declared a net loss.
The national fiat Korean won dominated the crypto trading market, accounting for 95 percent of total crypto transactions, primarily from Upbit, Bithumb, Coinone, and Korbit.
The won’s dominance in the Korean crypto sector may be traced back to a new crypto licencing rule announced in 2021, which required crypto exchanges to open real-name bank accounts for dealers in collaboration with a certified bank. Nearly 200 small and midsize crypto exchanges were put out of business as a result of the legislation, as banks refused to work with them or supply any of their services.
According to an FSC study released by The Korea Herald, there are a total of 15.3 million registered crypto exchange customers, but only 5.58 million of them traded in 2021. Nearly 3.1 million of the 5.58 million crypto users have assets worth less than 1 million won ($850), while 15% of the traders have assets worth more than 10 million won ($8,500).
South Korea’s crypto licence rules drove away the bulk of medium and small exchanges, and those that remained were forced to abide by severe privacy laws that prohibited transactions from secret wallets and flagged transactions above a specific value. Another proposal for token issuers was released in November with the goal of retrieving unlawfully obtained cash, enforcing criminal penalties, and safeguarding investors from future fraud.
Another proposal for token issuers was released in November with the goal of retrieving unlawfully obtained cash, enforcing criminal penalties, and safeguarding investors from future fraud.
By the fourth quarter of 2021, Korean regulators had moved their focus to crypto taxation, proposing a 20% tax on crypto profits. However, the tax policy was postponed for another year due to a lack of clear market laws.
In recent years, the country has moved its focus to nonfungible tokens, and it may become one of the first countries to issue NFT tax legislation.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.
