- With roughly 3.8 percent of the population owning some type of crypto asset, the country is well-known as a trading hotspot.
- For the fiscal year ending in 2021, regulated South Korean VASPs facilitated crypto transactions worth more than $1.7 trillion.
- According to reports, the total net profit from that operation was as high as $2.78 billion.
According to a survey conducted by a section of South Korea’s major financial regulatory body, virtual asset service providers (VASPs) made a significant net profit last year, totaling more than KRW 3.3 trillion (US$2.78 billion) from trading activity.
The poll, which was released on Tuesday, is the first of its sort since VASPs were compelled to register with the Korea Financial Intelligence Unit (KoFIU) last year as a result of the modified Reporting and Using Specified Financial Transaction Information Act.
According to KoFIU, the goal of the study is to obtain a better knowledge of the bitcoin sector using statistical data provided by individual company operators.
A total of 29 VASPs had been approved as of the end of December 2021, including 20 “coin-only” exchanges, five crypto wallets, and four Korean won-based exchanges. Since then, two more wallets and coin-only exchanges have joined the list, bringing the total number of VASPs functioning lawfully in South Korea to 33.
Korean won-based exchanges surpassed their coin-only counterparts in terms of market share, accounting for 99.3 percent of domestic operating profits vs 0.7 percent. According to the watchdog, some coin-only exchanges may be restructured.
The KoFIU, which was established in 2001 as part of the Financial Services Commission, is responsible for monitoring and policing financial markets as well as enforcing anti-money laundering policies.
According to the poll, total transactions across 24 “virtual asset exchanges” were KRW2.073 quadrillion (US$1.7 trillion) in the second half of 2021, with an average daily transaction amount of KRW11.3 trillion (US$9.4 billion).
Since the FSC banned the use of ICOs for raising cash in 2017, the country’s regulatory framework has been progressively evolving. Even still, some local officials fear that present regulations are insufficient to combat money laundering, especially as crypto trading volumes begin to catch up to equities.
“Despite the fact that the virtual asset market creates substantial money laundering risks, the existing proportion of AML employees (8%) is insufficient and has to be enhanced.”
According to data from payments provider Triple A, South Korea ranks 16th in terms of crypto adoption, with 1.9 million people, or 3.79 percent of the country’s 55.7 million people, owning some type of crypto asset.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.