South Korean investors are moving crypto activity offshore as the global digital-asset market expands beyond spot trading into derivatives, payments, and on-chain services, according to a report from Tiger Research produced with Chainalysis data. After tracking roughly 120,000 wallets linked to Korean users, the study estimates that around KRW 700 trillion, or about $530 billion, flowed from Korean exchanges to overseas venues between 2021 and 2026.
The report says the shift is not limited to centralized exchanges. Capital leaving Korean exchanges also moved into decentralized exchanges, prediction markets, and crypto card payment rails, turning what the researchers describe as unmet domestic demand into offshore trading activity, service usage, and spending.
Global crypto markets widened while South Korea stayed centered on spot trading
Tiger Research says the structure of the global digital-asset market has changed materially. Spot Bitcoin and Ether ETFs opened broader channels for institutional capital, perpetual futures and options have grown quickly, stablecoins are being used not only in trading but also in payments and remittances, and tokenized real-world assets are changing how assets are issued and distributed.
South Korea, by contrast, remains heavily focused on retail spot trading, with limited institutional participation and no large-scale domestic market in derivatives or newer financial services, the report says. As overseas venues widened their product set, South Korea’s structural gap with global markets also widened.
The study points to trading mix as one visible sign of that gap. Global exchanges expanded into perpetual futures and other products, while Korean trading activity remained concentrated in spot markets. As a result, Korean exchanges have been taking a smaller share of combined volume across major domestic and overseas venues, according to the report.
Researchers estimate $530 billion in offshore outflows from 2021 to 2026
The report argues that lower domestic market share does not mean Korean investors have lost interest in digital assets. Instead, products and services that remain difficult to access in South Korea have developed quickly offshore, and investors followed.
Using on-chain analysis to trace flows from Korean exchanges to overseas exchanges, Tiger Research and Chainalysis estimate that about $530 billion moved abroad through those channels between 2021 and 2026. Outflows reached about $120 billion in 2025, and the 2026 figure is estimated at about $52 billion. The researchers note that these figures cover only identifiable flows and say the real scale could be larger.
The report also warns against reading lower absolute outflows as evidence that the trend is easing. Broader market contraction pulled down both Korean trading volume and gross outflow values, so the study introduced a net outflow ratio to measure intensity. That ratio divides net outflows to overseas exchanges by total spot trading volume on Upbit, Bithumb, and Coinone. Absolute outflows declined, the report says, but the net outflow ratio continued to rise, indicating that capital has been leaving faster than the domestic market has been shrinking.
Fee revenue is the most direct economic value transferred abroad. Using its own methodology, Tiger Research estimates that Korean investors generated about $3.5 billion in fee income for overseas exchanges in 2025 and another roughly $900 million in the first half of 2026. The report says foreign operators are also accumulating customer relationships, transaction data, and the experience needed to design and run new products.
Capital leaving Korean exchanges continued into on-chain markets
Tiger Research used Chainalysis Reactor to trace funds tied to wallets it identified as being held by Koreans. According to the report, capital that moved offshore did not remain parked at foreign exchanges. It passed through personal wallets and then into on-chain services, including decentralized exchanges and prediction markets.
To test whether this pattern was broader than a small set of addresses, the study expanded its scope to around 120,000 wallets tagged by Tiger Research as belonging to Korean investors. It found meaningful activity beyond foreign centralized exchanges, including leveraged trading on decentralized venues and participation in prediction markets.
Decentralized derivatives drew demand that was not met at home
For the period from January 2024 to July 2026, wallets labeled as Korean deposited about $1.64 billion into Hyperliquid, Lighter, and Variational, the report says. Those platforms host active leveraged trading centered on perpetual futures and, in the researchers’ view, absorbed derivatives demand that investors could not easily access domestically.
In July 2026 alone, roughly 1,200 Korean-linked wallets generated $4.97 billion in notional volume on Hyperliquid. The report notes that leverage magnifies notional figures, but says nearly $5 billion in a single month still points to meaningful on-chain derivatives activity by Korean investors.
Trading on Hyperliquid was not limited to crypto assets. From January to July 2026, wallets tagged as Korean traded contracts tied to SK hynix, Samsung Electronics, and crude oil. The report says this appears to reflect demand for high leverage and for trading outside regular market hours, allowing investors to take positions in traditional assets in ways the current domestic market does not offer.
The study identified about 7,000 Korean-linked wallets during the review period, and says wallet sizes varied widely. In July 2026, one Korean-linked wallet posted about $780,000 in margin for a 10x leveraged short position in an SK hynix perpetual contract on Hyperliquid. Large accounts, the report says, are active in on-chain derivatives alongside smaller participants.
Prediction markets also saw heavy Korean participation
Korean investors were active on prediction markets as well, according to the report. Chain analysis covering January 2024 through July 2026 identified about 3,700 Korean-linked wallets on Polymarket, with cumulative trading volume of about $438 million.
Volume climbed sharply during major political events in South Korea. From March through June 2025, impeachment proceedings and the presidential election came in close succession, and markets tied to South Korea accounted for more than half of total trading volume generated by Korean-linked wallets during that period. Across the full sample window, cumulative volume in Korea-related markets reached about $62 million.
After the presidential election ended, the share of Korean political markets fell quickly, but trading continued across a wide range of topics, including global affairs, the World Cup, the KBO League, the LCK, and even weather forecasts for Seoul. The report says this suggests Korean participation in prediction markets extends beyond a single political cycle or event.
By category, global topics such as the U.S. presidential election ranked near the top by trading volume, while Korean political markets, including one on Lee Jae-myung winning the presidency, also recorded high volume. Measured by the number of participating wallets, however, Korean political markets such as Lee Jae-myung winning the presidency and former President Yoon Suk Yeol being removed from office attracted more Korean-linked wallets than the U.S. election market, indicating broader retail-style participation in domestic political topics.
Crypto cards extended offshore demand into spending
The report says crypto cards are rapidly widening the use of digital assets in payments by connecting them to existing bank-card networks. Users can issue virtual cards through an app for online and mobile payments, and some services also provide physical cards for use with offline merchants.
Demand for offshore crypto cards is also rising in South Korea. As of late July 2026, major crypto card apps including RedotPay, KAST, ether.fi, Tria, and Plasma had an estimated 38,000 cumulative downloads in South Korea, the report says. On-chain analysis of RedotPay and ether.fi identified about 1,000 Korean-linked wallets across the two services.
Funds flowing into crypto cards have been trending upward. Since the South Korean won stayed weak against the U.S. dollar in 2026, monthly top-up volumes on RedotPay and ether.fi increased materially. The report says the data do not establish a direct causal link between the exchange rate and top-up activity, but the pattern suggests that some users are holding dollar-pegged stablecoins not only as a store of value but also as funding for card spending.
Payment activity is more visible through ether.fi than through RedotPay, according to the study. RedotPay’s on-chain data mainly capture card top-ups, while ether.fi data extend into payment-related fund flows, making it possible to observe merchant payments from Korean-linked wallets. That, the report says, shows stablecoins being used not only for holding but also for everyday spending.
The report includes one path traced from a high-net-worth Korean-linked wallet: funds moved from a Korean exchange to a personal wallet, then into trading on Hyperliquid and Polymarket, and later a portion was transferred to an ether.fi card for payments. In the researchers’ view, that sequence shows how capital leaving Korean exchanges can keep circulating offshore and on-chain, moving from investment into consumption.
The report says there is still a window to change the direction of flows
Tiger Research argues that the scale of offshore capital is already large, but not irreversible. The study says two things must happen at the same time: South Korea needs a market structure capable of retaining domestic capital, and it also needs a smoother route for capital already offshore to return.
On the retention side, the report says Korean companies need to be able to meet changing investor demand at home. Global markets have expanded from spot trading into derivatives and service layers, while traditional assets are now being traded in formats such as stock perpetuals and tokenized equities. South Korea, the report says, has not yet established the rules and standards needed for those products, and exchange businesses remain concentrated in spot trading.
The study contrasts that with global operators such as Coinbase and Binance, which expanded into adjacent businesses including derivatives and institutional services and either built or acquired the required technology and infrastructure. Korean operators, by comparison, have struggled to broaden their crypto business lines domestically and have often had to look to other industries for growth. The key difference, the report argues, is not ambition but whether regulation allows new demand to be turned into operating businesses.
Stock perpetuals are one example cited in the report. Korean-linked wallets were found trading perpetual contracts tied to Korean equities such as SK hynix on offshore platforms. Those contracts tracked Korean stock prices closely and kept trading at night and on weekends after the local equity market had closed. The report says they therefore served not only as an offshore outlet for unmet demand, but also as a source of price discovery outside regular Korean market hours.
Rather than approving products one by one, the study argues for a regulatory framework that sets investor-protection and risk-management standards and lets companies that meet those requirements commercialize new products and expand with demand.
AML controls and tax uncertainty may slow capital returning home
Even if South Korea creates more domestic opportunities, capital that has already moved offshore will not automatically come back, the report says. Returning funds requires multiple verification steps, and ambiguity around reporting and tax treatment adds to the burden.
The study points to amendments to the enforcement decree of the Act on Reporting and Use of Certain Financial Transaction Information, which are tightening anti-money-laundering controls on virtual-asset transfers. The travel rule would apply regardless of transaction size, while transfers involving offshore exchanges and personal wallets would face risk-based controls. The report says AML measures remain necessary, but unclear verification requirements could make legitimate repatriation harder, and it calls for clearer standards to reduce unnecessary friction.
Tax treatment is another source of uncertainty. Once taxation takes effect, investors bringing offshore assets back into South Korea will need to verify acquisition cost and transaction history. For assets that moved among offshore exchanges, personal wallets, and on-chain services, the standards for handling complex transactions and accepting supporting documents are still not specific enough, according to the report. It says the issue is not taxation itself but the burden and uncertainty investors face when reconstructing and reporting prior transactions before the rules are fully settled. The study adds that outflows from Korean exchanges have often increased when search interest around tax filing rises, making that uncertainty relevant to capital movement.
In the report’s view, any effort to bring capital back needs to do two things: revise rules that unnecessarily restrict legitimate movement of funds, and clarify the standards and procedures for controls that remain necessary. Only then, it says, will offshore capital have a practical path to return.
Recapturing even part of the activity could mean fee income and broader market capacity
The study says South Korea is losing more than capital balances. As unmet domestic demand turns into offshore trading and service use, foreign operators are collecting the income and business opportunities tied to that activity.
On trading fees alone, the report estimates that Korean investors paid about $3.5 billion to overseas exchanges in 2025. If activity levels and fee rates stayed unchanged, routing 10% of that trading volume through Korean operators would generate about $357 million in revenue, 25% would translate to about $893 million, and 50% would amount to about $1.79 billion. The report says none of those figures require creating new demand; they depend on recapturing activity that is already happening offshore.
The study also compares Coinbase with Dunamu. Coinbase started with spot trading and expanded into custody, institutional services, and stablecoins, and by the first quarter of 2026 nearly half of its total revenue came from non-trading businesses, according to the report. Dunamu, by contrast, still derives most of its revenue from KRW spot trading fees. The implication, the report says, is that the same underlying digital-asset demand can produce very different market sizes depending on whether operators are able to connect it to a wider product and service stack.
The report closes by saying South Korea remains in a critical window. Global markets have moved quickly, but the country has yet to build the regulatory base needed to commercialize new products and services. It points to Thailand’s policy of exempting personal capital gains tax on digital-asset trading through licensed domestic operators between 2025 and 2029 as one example of using tax policy to direct trading activity into regulated local markets. South Korea, the report says, could also treat tax policy as a tool for attracting capital and transactions back home rather than only as a revenue source.
Even partial repatriation of the demand and capital now flowing offshore would do more than recover trading fees, the report argues. It would expand the addressable market for Korean operators building new products and services and could feed through into company growth, industry competitiveness, and a broader tax base.