South Korean investors significantly reduced their cryptocurrency exposure over the past year as more capital shifted into the country’s rising stock market.
Summary
Crypto holdings in South Korea dropped from $83.3 billion to $41.4 billion within a year.
Trading activity across the country’s five largest crypto exchanges declined sharply as investors favored equities.
Upcoming anti-money laundering rules and a planned 2027 crypto tax could place additional pressure on domestic exchanges.
Data from the Bank of Korea, submitted to Representative Cha Gyu-geun, showed that crypto holdings fell from 121.8 trillion won ($83.3 billion) at the end of January 2025 to 60.6 trillion won ($41.4 billion) by the end of February 2026.
Trading activity also weakened considerably across major South Korean exchanges including Upbit, Bithumb, Korbit, Coinone, and Gopax. Average daily trading volume dropped to around $3 billion in February, compared with $11.6 billion in December 2024, reflecting declining participation from retail traders.
Investors shift toward equities
The decline coincided with a strong rally in South Korea’s stock market, prompting many investors to move funds away from crypto and into equities. Falling cryptocurrency prices also contributed to the lower overall value of digital assets held on local exchanges.
Fiat deposits on exchanges fell as well. Korean won balances reportedly declined from 10.7 trillion won at the end of 2024 to 7.8 trillion won, signaling weaker demand for crypto trading activity.
Stablecoins, however, followed a different trajectory. Holdings surged from roughly $60 million in July 2024 to $597 million by December before sharply falling back to $41 million in February 2026. Earlier reports indicated that stablecoins accounted for nearly half of South Korea’s crypto outflows during the first quarter of 2025, as users increasingly transferred funds to overseas exchanges. Regulators have since intensified monitoring of cross-border digital asset flows.
Regulatory pressure continues to build
South Korea is also preparing stricter anti-money laundering measures. Starting in August, transactions exceeding 10 million won involving overseas crypto exchanges or private wallets may automatically be flagged as suspicious.
At the same time, the country is continuing to develop regulated blockchain infrastructure. Samsung SDS was recently selected to build the token securities platform for the Korea Securities Depository ahead of South Korea’s new tokenized securities framework scheduled to launch in February 2027.
The latest developments suggest South Korea is simultaneously tightening oversight of cryptocurrency activity while continuing to invest in regulated blockchain-based financial systems.
