South Korea’s Crypto Exchanges See High Foreign Registration, Low Trading Activity

South Korea’s five major virtual asset exchanges have registered over 566,000 foreign accounts and nearly 6,600 corporate accounts, yet only a small fraction of these accounts are actively used for trading, according to a report from the Seoul Economic Daily.

As of the end of last month, the combined registrations across the exchanges—which include industry leaders such as Upbit, Bithumb, Coinone, Korbit, and Gopax—stood at 6,590 corporate accounts and 566,352 foreigner accounts. However, the report highlights a significant gap between registration and actual engagement.

Active Usage Remains Minimal

Among general corporate accounts, only 29 were active in the past month, meaning they were used at least once for trading, swaps, staking, or virtual asset deposits and withdrawals. Of those, 22 belonged to Dunamu, the operator of Upbit, South Korea’s largest cryptocurrency exchange. This suggests that even among institutional players, participation in the crypto market is cautious and selective.

The low activity rate among foreign accounts is also notable. While the exact number of active foreign accounts was not disclosed, the report implies that the vast majority of these registrations remain dormant. This pattern may reflect regulatory uncertainties, complex verification processes, or a lack of compelling use cases for international traders in the Korean market.

Regulatory and Market Context

South Korea has one of the most stringent regulatory environments for cryptocurrencies in the world. The country’s Virtual Asset User Protection Act, which took effect in July 2024, mandates strict compliance for exchanges, including real-name verification and anti-money laundering measures. These requirements may deter foreign and corporate users from actively trading, as they must navigate additional legal and administrative hurdles.

The data also comes amid a broader global slowdown in crypto trading volumes, following the peak of the 2021 bull run. South Korean exchanges have seen a decline in daily trading volumes, and the low active account numbers could be a reflection of this market cooling. Additionally, the recent volatility in global crypto markets, coupled with regulatory crackdowns in other jurisdictions, may have made institutional players more cautious.

Implications for the Crypto Industry

The high registration but low activity among foreign and corporate accounts raises questions about the effectiveness of South Korea’s regulatory framework in attracting serious institutional participation. While the country has positioned itself as a hub for blockchain innovation, its strict rules may be inadvertently discouraging active trading by international and corporate entities.

For the exchanges, this means that their user bases are predominantly domestic retail investors, which could limit growth potential. It also suggests that the market may be more susceptible to retail-driven volatility, as institutional participation remains thin.

Conclusion

South Korea’s crypto exchanges have succeeded in attracting a large number of registrations from foreign and corporate users, but the actual trading activity is minimal. This disconnect highlights the challenges of regulatory compliance and market conditions in fostering active participation. As the global crypto landscape evolves, it will be interesting to see whether South Korea adjusts its policies to encourage more robust engagement from these segments.

FAQs

Q1: Why do foreign and corporate accounts have low activity on South Korean exchanges?
Possible reasons include strict regulatory requirements, complex verification processes, and a cautious market environment that discourages active trading.

Q2: Which exchange has the most active corporate accounts?
Dunamu, the operator of Upbit, has the highest number of active corporate accounts, with 22 out of the 29 total active corporate accounts.

Q3: What is the significance of these findings for the crypto market?
The findings suggest that despite high registration numbers, institutional and international participation remains limited, which could impact market liquidity and growth.