TL;DR
- South Koreans moved over 160 trillion won, about $110B, from local exchanges to offshore venues in 2025, per CoinGecko and Tiger Research.
- Delays to the Digital Asset Basic Act and limits to spot trading left locals seeking leveraged derivatives and broader products on Binance and Bybit.
- Aju Press said large overseas exchange accounts more than doubled; with 10 million investors and trillion-won revenues, growth now stagnates as gaps persist domestically.
South Korea’s crypto market entered 2026 with a sobering datapoint: more than 160 trillion won, about $110 billion, moved from local exchanges to foreign platforms in 2025, according to joint research from CoinGecko and Tiger Research. Capital flight is being framed as a policy side effect, not a sudden loss of interest for active traders. For portfolio managers, the shift reads as regulatory arbitrage in real time, not fading conviction. Regulators delayed the Digital Asset Basic Act in December after disagreements over stablecoin issuance, leaving a gap investors are filling offshore.
Why capital went offshore
That gap is practical, not theoretical. Domestic centralized exchanges operate under strict rules that keep them largely confined to spot trading, while overseas venues provide a wider menu of products. Investors are chasing product breadth as much as yield, especially when foreign platforms can offer leveraged derivatives and other complex instruments that local exchanges cannot market to retail traders. With fewer hedging and leverage choices at home, traders increasingly route activity to offshore names such as Binance and Bybit. That mismatch has turned offshore venues into default hedging desks for locals.
Korean media has tracked how quickly this behavior is scaling. Aju Press reported in November that the number of South Korean investors holding large sums in overseas exchange accounts has more than doubled in a year, citing both the global market’s resurgence and frustration with restrictions at home. Crypto has become a primary investment asset domestically, at this scale, with investor counts reaching 10 million and exchanges such as Upbit and Bithumb generating revenues in the trillions of won. Yet, the report says growth is stagnating as capital keeps leaking abroad.
The regulatory timeline helps explain the disconnect. The Virtual Asset User Protection Act took effect in 2024, but it does not cover market-structure questions like leverage or derivatives trading. Market participants worry that without DABA, Korean exchanges will struggle to compete with offshore rivals offering more complex products. Officials acknowledge new rules are needed, yet alignment is lagging due to stablecoin debates that delayed the framework. For 2026, the message is clear: tighten rules without a full market design and flows will keep migrating overseas, and domestic platforms risk becoming second-tier.
