South Koreans Shift KRW 160T in Crypto to Overseas Exchanges
South Korean crypto investors have moved roughly KRW 160 trillion (about $120–140 billion depending on rate) in cryptocurrency to overseas exchanges, driven by regulatory pressure and restrictions at domestic platforms. The outflows intensified after stricter local compliance rules, bank-crypto account delistings and heightened scrutiny by regulators. Traders and institutions cited concerns over domestic transaction limits, rising compliance costs, and potential enforcement actions as reasons for shifting assets abroad. Market observers warn the flows could reduce domestic liquidity, increase volatility on Korean exchanges, and route more trading volume through larger international venues. No single coin was identified as dominant in the transfers; activity encompassed major tokens traded on South Korean platforms. The movement highlights regulatory arbitrage — users seeking more flexible trading, yield and custody options offshore — and may prompt policy responses or adjustments by domestic exchanges to retain users.
Bearish
Large-scale transfers of KRW 160 trillion from domestic to overseas exchanges indicate a significant outflow of liquidity from South Korean markets. Reduced onshore liquidity can widen spreads, lower local order book depth, and increase short-term volatility for assets heavily traded in Korea. Regulatory-driven capital flight often signals uncertainty and risk aversion among retail and institutional participants, which tends to weigh on local price support and trading volumes. In past episodes (e.g., regulatory crackdowns in other jurisdictions), similar outflows have correlated with temporary price declines and increased volatility until either regulatory clarity returned or users adapted to new venues. Over the longer term, if outflows persist, Korean exchanges may lose market share to global platforms, reducing domestic influence on price discovery. That could be neutral for global liquidity overall but bearish for Korea-centric premiums and for local exchange token projects. Traders should watch on-chain flows, exchange reserves, KRW-BTC/ETH basis spreads, and order book depth on Korean venues as near-term indicators of continued downside risk and volatility.