South Korea’s digital asset market is seeing unprecedented capital flight. According to the Financial Intelligence Unit (FIU), more than ₩101.6 trillion worth of cryptocurrencies were transferred from domestic exchanges to overseas trading platforms or private wallets during the first half of this year — the first time the figure has surpassed ₩100 trillion in a six-month period.
Of this total, about ₩20.2 trillion involved transfers exceeding ₩1 million per transaction, which fall under the government’s travel rule reporting framework. The remaining ₩80 trillion flowed out to unregistered overseas entities or private wallets, escaping domestic oversight. During the same period, Korean exchanges saw their KRW deposits shrink sharply, from ₩10.7 trillion in late 2024 to just ₩6.2 trillion by mid-2025.
This trend points to deeper structural challenges beyond market cycles. The share of large investors is declining, and the pace of new retail inflows has slowed noticeably. With tighter local restrictions and limited product diversity, many Korean investors are shifting toward offshore exchanges that offer wider access to altcoins and derivatives.
Lawmakers and industry leaders are calling the phenomenon a “national wealth outflow.” Representative Min Byung-deok of the Democratic Party warned that as much as ₩130.8 trillion worth of digital assets may have moved abroad due to regulatory gaps. He urged the government to enact the long-pending Digital Asset Basic Act and to introduce won-denominated stablecoins as a strategic measure to bring liquidity back onshore.
