South Korea's cryptocurrency holdings have been halved in one year, with investors shifting their funds to the stock market.

BlockBeats News, May 10th - The value of cryptocurrency held by Korean investors has been halved in the past year, dropping from 121.8 trillion KRW ($83.3 billion) at the end of January 2025 to 60.6 trillion KRW ($41.4 billion) at the end of February 2026. The daily trading volume of Korea's top five exchanges also plummeted to $3 billion in February, down from $11.6 billion in December 2024. Korean won deposits on exchanges also decreased from 107 trillion KRW at the end of 2024 to 78 trillion KRW. The decline is attributed to a dual effect of falling crypto prices and funds flowing into the stock market.

On the contrary, stablecoins have followed the opposite trend. Holdings increased from $60 million in July 2024 to a peak of $597 million in December, then fell to $41 million in February, a decrease significantly smaller than the overall crypto market. As the market shrinks, regulatory authorities are preparing to strengthen supervision. The financial regulator plans to implement revised Anti-Money Laundering (AML) rules in August, automatically flagging crypto transactions involving overseas exchanges or private wallets with amounts exceeding 10 million KRW as suspicious.

The industry group DAXA has raised objections to this, arguing that the rule is disproportionate and may drive users to offshore platforms like Binance. The industry group stated that the proposal could increase the number of suspicious transaction reports on Korea's top five exchanges by 85 times—from about 63,000 last year to over 5.4 million—making compliance operationally difficult. Discussions around the government's plan to implement a 22% crypto tax in 2027 are also intensifying. This Thursday, the Korean Ministry of Finance confirmed for the first time that a 22% tax on crypto gains will take effect as planned on January 1, 2027.