A Tiger Research study revealed a significant outflow of cryptocurrency capital from South Korea: approximately 160 trillion won (about $115.3 billion) moved to foreign exchanges in 2024. The primary explanation given is the "investment opportunity asymmetry" — Korean investors lack access to certain products and early token access offered abroad. As a result, a substantial portion of fees and trading activity shifted to foreign platforms; according to the report, Binance earned the highest profits from Korean users (around 2.73 trillion won). Tiger Research also warns of risks associated with simply blocking access to foreign exchanges and suggests a more managed approach to introducing new products.
Scale of Capital Outflow from South Korea
The outflow volume, estimated at 160 trillion won ($115.3 billion), reflects a mass migration of capital from local platforms to overseas exchanges. This flow is primarily driven by the search for products and conditions unavailable within the limited local ecosystem, along with a redistribution of commission revenues favoring foreign platforms. Simultaneously, the report notes a concentration of benefits among a few global exchanges, increasing competitive pressure on local players.
Part of the related activity also manifests in purchases and transfers abroad — details on changes in Korean investor behavior are discussed in other materials, revealing the scale of overseas acquisitions and shifts in trading volumes. For example, there are reports on how Koreans increased purchases of foreign crypto stocks, as well as analyses of changes in domestic trading volumes.
Economic Consequences for South Korea
The capital outflow leads to a leakage of commission revenues that previously generated profits for local exchanges and supported their development. This revenue decline hampers funding for innovation, product line expansion, and platform security investments, which in turn weakens the competitiveness of local platforms. The report explicitly states that such losses may limit the growth and development of the domestic ecosystem.
At the market level, this also alters the structure of trading activity and liquidity, impacting opportunities for both large and small participants. Local exchanges, including well-known platforms, face pressure from international competitors, intensifying the need to revise product policies and regulatory approaches.
Regulatory Challenges and Possible Solutions
South Korea has historically applied strict measures: a real-name system and restrictions on certain product types, including an ICO ban, limited the range of offerings on local platforms. These measures helped address security and compliance concerns but simultaneously increased the "investment opportunity asymmetry" highlighted in the report. Researchers believe that attempts to simply block foreign exchanges could result in a "balloon effect," where capital shifts to less controlled channels.
Instead of strict isolation, Tiger Research recommends steps toward controlled liberalization: gradual approval of regulated derivatives and establishing managed procedures for listing new tokens. These proposals aim to retain activity and capital within a monitored and controlled environment while maintaining oversight mechanisms and user protection. Discussions on potential regulatory changes also consider internal ICO approvals and rule adaptations.
Global Parallels and Historical Context
The situation in South Korea echoes experiences in other countries where strict regulation led to asset and talent redistribution abroad. The report cites examples of countries where stringent measures affected business and developer locations and notes competition for crypto capital from more flexible jurisdictions. These international examples serve as a warning that digital asset policies shape a country's competitive position in the global market.
Why This Matters
For a miner in Russia with 1–1000 devices, the direct impact of Korean capital outflow may be indirect but still significant: changes in liquidity flows and trading activity affect product availability and volumes on exchanges where you might sell mined assets. Meanwhile, the redistribution of fees and trading activity alters the global crypto infrastructure economy, which over time influences transaction convenience and costs.
Moreover, discussions about regulated liberalization and possible changes in listings and derivatives indicate that the market rapidly responds to legal signals from other countries. It is beneficial to monitor these changes as they affect liquidity and the choice of platforms for exchanging and converting mined cryptocurrency.
What to Do?
- Regularly check liquidity and fees on exchanges you use and compare them to optimize mining sale revenue.
- Assess risks of using foreign platforms: fund withdrawal availability, KYC requirements, and potential restrictions on working with Russian accounts.
- Maintain a backup plan: diversify sales across multiple platforms and withdrawal methods to reduce dependence on a single exchange.
- Follow regulatory initiatives and research report recommendations to prepare in advance for product access changes.
- Prioritize security: regularly update key and wallet protections to minimize loss risks when transferring funds between platforms.
For a deeper understanding of related trends and local shifts, materials on the topic cover South Koreans' overseas asset purchases and changes in domestic trading volumes, providing additional context for risk and opportunity assessment.