By the close of 2021, South Korea’s Crypto Asset Market had grown dramatically. The market valued at $45.9 billion (55.2 trillion Won). The Financial Service Commission (FSC), the nation’s principal financial regulator, offered this data to the public.
The financial regulator performed a one-of-a-kind analysis based on data gathered from 24 licensed crypto trading organizations. These cryptocurrency trading organizations revealed that the aggregate daily mean volume transaction increased to $9.4 billion. Based on the same analysis performed by The Financial Service Commission, the volume of consumers also showed a favourable increase and was nearly approaching 5.58 million.
It is common knowledge that South Korea has stringent policy compliance requirements. For most of 2021, the country continuously made news about Know Your Company and travel rules. Notwithstanding these regulations, the crypto asset industry grew significantly in 2021.
Korean-Won denominated cryptocurrency providers such as Upbit, Bithumb, Coinone, and Korbit were responsible for 95 percent of total activities. The entire running gain of the 24 regulated exchanges was close to $2.8 billion. Only nine crypto trading marketplaces reported net losses.
New Licensing Mandate
A new authorization rule announced in 2021 took the dominance of the won in the Korean cryptocurrency sector into consideration. This newly obtained permit mandates cryptocurrency exchanges to disclose actual bank accounts of users with the link to a recognized bank. As a result of this new type of regulation, around 200 small to medium-sized crypto firms put out of operation. Since banks refused to collaborate and give their services.
As per the FSC research, there are 15.3 million crypto trading consumers, with only 5.58 million users transacting in 2021. Approximately 3.1 million of the 5.58 million crypto consumers possess crypto assets valued at less than a million won, or roughly $850; however, 15% of the traders hold assets worth more than 10 million won, or $8,500.
As previously stated, several small and medium marketplaces were forced to shut down operations due to the new license rule. Only those that are now in operation have consistently conformed to rigorous privacy requirements. Frequently prohibiting transactions from private wallets and reporting transactions over a specific threshold.
In November of last year, other measures for cryptocurrency providers were also released to retrieve unlawful funds and particularly safeguard investors from suspected malpractices. When contrasted to the typical stock transaction rate on Korean exchanges, the average rate for miners’ charges or transaction fees is also relatively high. Notwithstanding this, interest in cryptocurrency has surged in South Korea.
Males in their 30s accounted for 21.7 percent of the 5.58 million traders, females in their 30s constituted 9.5 percent, and women beyond 30 constituted 9 percent of the trading community.