South Korean Crypto Exchanges Struggle Amidst Trading Slump

The South Korean cryptocurrency market has been facing a significant downturn in recent months, with five major domestic virtual asset exchanges experiencing a sharp decline in trading volumes. According to data from CoinGecko, Upbit, Bithumb, Korbit, Coinone, and Gopax have seen their ranking drop significantly in the global exchange rankings.

The main causes of this slump are attributed to weak virtual asset prices and investor exodus due to reduced volatility in high-market-cap assets such as Bitcoin and Ethereum. The regulatory environment in South Korea has been criticized for limiting participants to domestic individual investors, with no stable demand entities like virtual asset exchange-traded funds (ETFs) existing in the market.

The absence of corporate virtual asset investment limits and methods has further exacerbated the situation, leading to a decline in profitability for exchanges. With trading fees accounting for approximately 98% of company revenue, exchanges are bracing for significant declines in operating profit. Analysts warn that this poor performance may impact exchange ownership changes, as seen with Upbit's integration into the Naver Group and Korbit's acquisition by Mirae Asset Group.