Korean Crypto Exchanges Lose 35% Deposits as Traders Chase 150x Offshore Bets

• Market cap on local platforms fell 33% and won deposits dropped 35% in first half of 2026
• Over 700 trillion won exited Korean exchanges since 2021 amid looming tax changes

On October 2, 2026 (UTC), Korea JoongAng Daily reported that South Korean crypto exchanges lost one-third of their combined market value and local currency deposits between January and June 2026, as local traders migrated assets to offshore platforms promising high-risk, leveraged investment products.

Combined market capitalization on domestic exchanges tumbled from 87.2 trillion won to 58.9 trillion won, while won-denominated deposits fell from 8.3 trillion won to 5.4 trillion won during the period, reflecting a 33% and 35% decline respectively. The Korea Financial Intelligence Unit and Financial Supervisory Service pointed to the global downturn in crypto prices, but emphasized that restrictive domestic investment options and the prospect of a new crypto tax in 2027 accelerated capital flight to foreign exchanges.

A Financial Services Commission statement highlighted a growing preference for offshore platforms, where traders can access leverage up to 150 times the Kospi index—far beyond the limits set by South Korean regulations. This shift pushed local crypto trading turnover down 44% and slashed operating income by 78% to 81.6 billion won, exposing broad contraction within the sector.

Cryptopolitan estimated that over 700 trillion won, or $530 billion, exited Korean exchanges from 2021 to 2026. Outflows intensified this year as industry representatives warned lawmakers that additional capital would flee unless the upcoming crypto tax was delayed.

Legislative debate is ongoing, with policy makers weighing whether tax postponement could slow capital migration and reinforce investor protections, against the risk of further weakening the domestic crypto market.