South Korea’s crypto market recorded a major capital shift in the second half of 2025. According to the Financial Services Commission, roughly $60 billion in crypto assets moved out of domestic exchanges to overseas platforms and private wallets, representing a 14% increase from the first half of the year. Regulators linked the rise in outflows partly to arbitrage activity during a volatile market period.
Outflows Rise Even as User Accounts and Deposits Grow
Despite the sizable asset migration, participation in the local market continued to expand. The number of user accounts rose 3% to 11.1 million, while deposit volumes climbed 31% to KRW 8.1 trillion. The figures suggest that retail engagement remained intact, but capital was increasingly being redirected away from domestic venues and toward offshore exchanges or self-custody solutions.
Exchange Earnings and Market Value Move Lower
Financial performance across the sector weakened sharply. Net profit at 18 local exchanges fell 38% to KRW 380.7 billion. At the same time, the total market capitalization of South Korea’s crypto market dropped 8% to KRW 87.2 trillion. Daily trading volumes also declined 15% month over month, pointing to softer market activity and reduced fee generation for trading platforms.
Regulators Point to Falling Crypto Prices
Authorities said the decline in major cryptocurrency prices was the main reason behind weaker trading activity and lower profitability. As prices fell, investor appetite cooled and exchange revenues came under pressure. Taken together, the latest data shows a market where user growth continues, but domestic exchanges are facing simultaneous challenges from capital outflows, weaker turnover, and shrinking profits.