A wave of closures has hit South Korean crypto exchanges, with smaller firms exiting the market as regulatory compliance and banking access remain hurdles.
South Korea‘s crypto exchange market is getting smaller, as new government data shows the number of registered virtual asset service providers has dropped since last year.
A Feb. 7 report from the Financial Intelligence Unit revealed that as of press time, there are only 31 registered crypto trading firms in South Korea, down more than 26% from 42 last year, South Korean newspaper Dailian reports.
The delisted companies include GDAC, ProBit, Huobi Korea, and Bitrade, among others. The report says that most of the exchanges that left the Korean market were token-only platforms without fiat support, which faced difficulties staying in business.
In addition to business hurdles, many platforms failed to renew their registrations, thereby leading to their exclusion from the nation’s registry, the report notes.
Token-only exchanges, which don’t have real-name bank accounts, have been in trouble for a while. Without fiat trading options like the U.S. dollar or Korean won, these platforms struggle to attract users. The FIU report says, “over 90% of these exchanges were in a state of complete capital erosion last year.” Many of these exchanges, including Qubit and Coinbit, eventually shut down.
The report also warns that the number of crypto exchanges in South Korea may drop further, as some firms still on the list have already announced plans to exit, while others are shifting their focus to overseas markets due to regulatory uncertainty.
