The Korean crypto market is facing a subtle shift. According to the latest analysis data, by 2025, Korean investors are expected to transfer over 160 trillion KRW (approximately $110 billion USD) of funds to overseas exchanges due to tightening domestic regulatory environments. This is not just a simple transfer of funds—fee income, trading volume, and even market dominance are quietly shifting outside the borders.

South Korea has about 10 million active crypto investors, accounting for one-fifth of the national population. The market trading volume once rivaled the global USD-denominated trading volume. Domestic leading platforms like Upbit and Bithumb experienced rapid growth, with revenue reaching trillions of KRW. However, the growth curve is now flattening.

Where is the problem? The domestic regulatory framework is becoming increasingly strict. Restrictions on major shareholders' holdings, fluctuating stablecoin policies, and conflicting opinions within banks and financial sectors—these measures inadvertently push investors to go abroad. When local exchanges are heavily constrained, the flexibility of overseas platforms becomes attractive. Investors are voting with their feet, flowing funds into more relaxed markets.

This creates a double blow for domestic Korean exchanges: reduced funds and lost fee income. Moreover, once investors get used to the liquidity and diverse functionalities of overseas exchanges, it won't be easy to bring them back. The balance of market competition is tilting.