Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

South Korea – A Peculiar Crypto Paradise

CryptocurrencyMay 31, 2021 10:01AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
South Korea – A Peculiar Crypto Paradise

Bitcoin has established itself as a gateway to financial sovereignty from financial institutions as well as any one central authority. Cryptocurrencies yield high financial returns for investors since they belong to a substrate of the economy. Stock prices are dependent on speculation as well as news events, and the prices of cryptocurrencies are similarly affected, if not even more susceptible to such external factors. As nation-states have embraced digitization in their financial systems, they’ve encountered a variety of irregularities pertaining to cryptocurrency.

How cryptocurrency is socially and economically perceived by countries is in a constant state of change. Every article of news such as “China To Ban Crypto,” or “Tesla (NASDAQ:TSLA) Accepts Bitcoin,” directly affects crypto market prices. Related to the effect of such current events, opinions held on bitcoin are in a constant state of flux. South Korea’s views on Bitcoin and crypto have fluctuated between 2017 and 2021, ranging between “zero,” and “hero,” in recent times. With that said, cryptocurrencies in South Korea stand in contradiction to the global market. But why is this?

A Strange Inclination To Cryptocurrency

In 2017, the Central Bank of South Korea stated in a research paper that cryptocurrencies and fiat issues currencies could coexist. However, they have emphasized that crypto still holds no intrinsic value.

Crypto is appealing to people in South Korea because they are acutely aware of shifts in the political and economic climate of the country, mainly because they share a border with Kim Jong Un. What’s more, according to reports from both 2018 and 2021, the job market for young adults is still relatively weak, offering limited returns or financial incentives. South Korean’s thus turn to cryptocurrencies, which exist in a market that is shielded from the influence of external pricing.

The unusual price movements of Bitcoin in South Korea created a new term, used as a reference for the gap between the prices of Korean exchanges and those on the global market, called “Kimchi Premium.” The gap was observed as early as 2017, when Bitcoin traded as high as 44% higher than the global market average. The gap was evident in the case of Ethereum as well, which traded with a premium of over 50%. In 2021, the gap is still apparent as it has maintained a Bitcoin price difference of $5,000 higher than U.S. Exchanges.

Korean exchanges are reasonably isolated from external factors. Their hesitation to adopt stablecoins is considered a significant setback for cryptocurrency adoption in the nation because of KRW’s lack of volatility. As data from 2017 indicates, South Korea had the leading Ethereum-to-fiat exchange rate on the global market. Despite not using stablecoins, reports have highlighted just how extraordinary trading cryptocurrency in South Korea really is, with Dogecoin experiencing a daily trade volume of $13 billion, compared to the monthly FX trade volume of just $7-8 billion.

On the Flipside

  • The South Korean government stated as early as 2017 that cryptocurrencies have no intrinsic value.
  • Due to strict regulations in the country, DeFi and CeFi have to coexist in a hybrid form.
  • Starting next year, cryptocurrency investors will have to pay 20% tax on their capital gains.

Stress vs Financial Gains

The South Korean government has enforced stricter guidelines regarding cryptocurrency trading, as well as its usage within the country. Their recent actions include preventing money laundering through (AML) checks, and making anonymous coin transactions such as Monero or Zcash illegal, as of March 2021. Korean exchanges also delisted privacy coins in 2018, following the ban on “anonymous crypto trading.” Although they do not allow the trade of such privacy coins, they do continue to allow the trade of meme coins.

Recent reports highlight that 63.3% of South Korean traders are experiencing “psychological side effects” as a result of the volatility in prices. In a 2018 article by Venture Beat, the author stresses that high fluctuations in 2017 created “emotional havoc” for traders, which supports recent findings. Despite this, crypto represents an affordable way to invest, although only 40% of those who have invested in this way have generated profit.

South Korea’s cryptocurrency craze is affecting more than just their young college students. A survey conducted in February indicates that 40-50-year-olds represent nearly half of the customer base of the top exchanges. In March, young adults between 20 and 30 years old accounted for almost two-thirds of new exchange sign-ups, likely generated by widespread FOMO, driven by media and other digital mediums.

Regulatory measures in South Korea are set to be reinforced even further as they reiterate their stance from 2017, stating, “a crypto asset is an asset that has no intrinsic value.” The result being that such crypto regulations build pressure on outside competitors, forcing their exchanges to halt South Korean operations. In 2020, Binance Korea was forced to cease operations due to a law shattering order, outlawing book sharing in the country. Additionally, in March 2021, OKEx ended operations as a result of the new AML laws which were put into place.


Join to get the flipside of crypto

Upgrade your inbox and get our DailyCoin editors’ picks 1x a week delivered straight to your inbox.

[contact-form-7] You can always unsubscribe with just 1 click.

Continue reading on DailyCoin

South Korea – A Peculiar Crypto Paradise

Related Articles

EOS Climbs 12% As Investors Gain Confidence
EOS Climbs 12% As Investors Gain Confidence By - Dec 08, 2021 - EOS was trading at $3.6163 by 19:48 (00:48 GMT) on the Index on Thursday, up 11.82% on the day. It was the largest one-day percentage gain since...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email