Key Highlights
- South Korean investors transferred 160 trillion won to offshore exchanges in 2025 to access trading features restricted by local laws.
- International platforms like Binance and Bybit generated 4.77 trillion won in fees, surpassing the combined revenue of Korea’s top domestic exchanges.
- Strict domestic regulations limited to spot trading have caused a drain of capital and users toward global and decentralized alternatives.
South Korean cryptocurrency investors moved an estimated 160 trillion won to international trading platforms in 2025, according to a joint report released today by CoinGecko and Tiger Research.
According to the report, the large movement of funds was mainly due to local regulations that restrict domestic exchanges to spot trading. As a result, over 10 million active users sought better financial options, such as derivatives and pre-market trading, on offshore centralized exchanges.
Foreign exchange dominance
This capital migration generated a major transfer of wealth through transaction fees. The report noted that South Korean traders brought in around 4.77 trillion won (about $3.36 billion) in fee revenue for five major foreign platforms: Binance, Bybit, OKX, Bitget, and Huobi.
Binance accounted for the largest share, capturing 57.7% of the total outflows, amounting to roughly 92.3 trillion won in principal. To put this in context, the fee revenue from these five foreign platforms is more than 2.7 times the total operating revenue of South Korea’s top five domestic exchanges, which include Upbit and Bithumb.
Strict local constraints
Traditionally, the South Korean crypto market has seen strong retail participation, with trading volumes in the Korean won often matching or surpassing those in the U.S. dollar. However, domestic platforms face strict rules from the Financial Services Commission (FSC), preventing the offering of leveraged futures and other complex derivatives.
While these regulations aimed to protect retail investors, the report argues that they have created an unfair situation. As market trends shifted to altcoins and early-stage listings, Korean investors often found that by the time tokens hit domestic spot markets, the best profit opportunities had already passed.
Market opportunity gap
The report suggests that simply tightening regulations or blocking access to foreign sites might not work. Data indicates that capital is already starting to flow into decentralized exchanges and personal wallets, with 2.7 trillion won shifting to non-custodial platforms in the first half of 2025.
If the regulatory environment stays the same, experts predict that capital outflows will increase as investors favor platforms that provide pre-market access and hedging tools. The research points to a growing need for a flexible regulatory framework that protects investors while keeping the domestic blockchain industry competitive.
The findings from Tiger Research and CoinGecko highlight a domestic industry struggling to keep its user base, despite high local interest. The transfer of 160 trillion won signifies not just a loss of liquidity for the local market but also a shift in the profit structure of the Korean crypto ecosystem to overseas markets.
Also Read: Crypto Tax Crackdown: UK Starts New Exchange Reporting Rules
