South Korean Ruling Party Official Sounds Alarm Over Crypto Market Risks

South Korean Ruling Party Official Warns of Crypto Market Risks

Hong Seong-guk, chairman of the Democratic Party's National Economic Advisory Council, urged policymakers to address digital asset market volatility and normalize asset markets amid a sharp downturn in cryptocurrency prices that has affected an estimated 10 million investors.

The South Korean crypto market is one of the largest in the world, with retail investors often trading at premiums compared to global exchanges. Hong pointed to several economic risks beyond digital assets, including potential inflation driven by the prolonged conflict in Iran and a semiconductor boom.

A prolonged downturn could have broader implications for household wealth and consumer spending. With millions of South Koreans exposed to crypto losses and the won under pressure, the government faces mounting pressure to deliver a coherent policy response.