South Korean Crypto Exchanges, Kimchi Coins Losing Out to International Rivals – Report

South Koreans are increasingly turning to overseas crypto exchanges, with trading volumes on domestic platforms dropping, a new report has found.

The South Korean media outlets FN News and News1 reported that the report was compiled by the country’s two top financial regulators, the Financial Services Commission and the Financial Supervisory Service.

The regulators examined data from a total of 17 crypto exchanges in the first six months of 2025, as well as eight crypto custody platforms and crypto wallet providers.

They found that amount of money and crypto transferred to overseas platforms reached 78.9 trillion won ($56.2 billion), making for a 4% increase.

Trading volumes on the Bithumb crypto exchange over the past 12 months. (Source: CoinGecko)South Korean Crypto Exchanges: Missing Out as Market Cools?

The report also found that the overall crypto market’s “upward trend” has begun to slow, following a strong finish to 2024.

The figures were not all grim reading for the South Korean crypto industry. User numbers grew, hitting the 10.77 million mark.

This represents an 11% increase from the end of last year, with a few corporate users opening accounts as Seoul relaxes restrictions. Most crypto traders are aged 30-39, making up 3 million or 27.9% of the total.

However, the regulators found that the size of the crypto-to-fiat market fell by 12%, even though the crypto-to-crypto market ballooned by 286%.

The domestic crypto market capitalization dropped 14%, with overseas market cap figures only falling by 7%.

South Korea’s largest crypto exchange Upbit will list FLUID with KRW, BTC, and USDT pairs. Fluid is a lending protocol and decentralized exchange (DEX). Upbit also announced the listing of Infinit (IN) and B3. IN will trade against BTC and USDT, while B3 will trade against USDT.…

— Wu Blockchain (@WuBlockchain) September 24, 2025 Deposits Down

While South Koreans remain relatively active on domestic crypto exchange platforms, they appear less keen to invest more of their fiat holdings.

KRW deposits fell by 42% to 6.2 trillion won ($4.4 billion), with the media outlets calling the drop “a sign of a significant decrease in standby trading funds.”

Traders also made less profits, with a 17% decrease since the second half of last year.

The top 10 coins per trading volume on the Upbit crypto exchange on September 30, 2025. (Source: CoinGecko)Geopolitics Giving Traders Cold Feet, Say Regulators

Exchanges also appear to be listing more tokens than ever in a bid to drive up trading volumes, with the trading pair total rocketing up from 181 to 1,538.

The regulators noted that 121 (or 43%) of these coins have a market capitalization of less than KRW 100 million ($71,232).

They noted that this “highlights the need to be mindful of market risks such as rapid price fluctuations and a lack of liquidity.”

Customer withdrawals also grew by 5% to reach the KRW 101.6 trillion ($72.4 billion) mark.

The total value of assets under the management of domestic custody and wallet operators decreased by a whopping 50% compared to the end of last year.

User numbers for these services also saw a sharp drop of 41%. The financial regulators wrote:

“Market growth has slowed and volatility has increased compared to the previous year due to global tariff-related disputes and heightened geopolitical tensions. Overseas corporate crypto buying has driven up Bitcoin prices. But weakening retail investor sentiment has led to mixed results for other tokens.”

South Korea’s internet giant Naver is closing in on a stock swap deal for Upbit operator Dunamu, a move that could shake up the country’s crypto market.#Naver #Upbit https://t.co/rBGGskyLFJ

— Cryptonews.com (@cryptonews) September 25, 2025 Kimchi Coins: South Korean Crypto Exchanges Turn Their Backs?

The report also contained bad news for so-called “kimchi coins,” low-cap South Korean projects that are typically only traded on domestic exchanges.

The number of kimchi coins listed on domestic exchanges has dropped by 3% over the past six months, despite the recent outbreak of a “listings war.”

The media outlets concluded that the decline of kimchi coins reflects recent listing trends. News1 wrote:

“Lately, crypto exchanges, both domestic and international, are increasingly looking to list promising overseas coins around the time of token launches. [South Korean exchanges are] listing tokens that are already actively traded on overseas exchanges, rather than opting for relatively high-risk [kimchi coin] listings.”

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