Operating profits for South Korean cryptocurrency exchanges plummeted 78% during the first half of 2026, falling to KRW81.6 billion. The downturn, documented by the Korea Financial Intelligence Unit, reflects a broader contraction in market participation as daily trading volumes and domestic crypto holdings retreated sharply across the board.
The cooling of the domestic crypto sector is evidenced by a 44% drop in average daily trading volume, which sank to KRW3.1 trillion. Customer engagement mirrored this decline, with won-denominated deposits shrinking by 35% to KRW5.2 trillion. By the end of June, the total value of crypto assets held on domestic platforms had fallen 33% to KRW58.9 trillion, down from KRW87.2 trillion at the close of 2025.
Despite the financial exodus, the number of active accounts remained resilient, edging up 0.4% to 11.175 million. This divergence suggests that while the user base remains intact, participants are trading less frequently or holding smaller balances. Data shows a marked increase in accounts holding less than KRW1 million, indicating a shift toward smaller, more cautious positions.
Market concentration remains extreme, with platforms supporting won-based trading controlling nearly the entire domestic value. Coin-only exchanges accounted for a negligible 0.6% of the total, struggling with significantly lower liquidity and turnover rates. This liquidity strain is particularly acute for assets listed on only one exchange; the KoFIU identified 93 such tokens with market values under KRW100 million, leaving them highly vulnerable to volatility. As the industry braces for a 22% tax on crypto gains set to take effect in early 2027, the sector continues to grapple with reduced external transfers and mounting losses in custody and wallet services.
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