South Korean Crypto Exchanges Report 566K Foreign Accounts with 90 Active Users

South Korea's cryptocurrency market faces significant challenges as a recent report by Rep. Park Sang-hyuk reveals that out of 566,352 foreign-held accounts across local exchanges, only 90 were active last month. This translates to an activation rate of a mere 0.01%, indicating that the vast majority of these accounts remain dormant.

Bithumb, one of the country's largest exchanges, dominates the foreign account landscape, holding approximately 484,846 of the total accounts. Only 517 foreign accounts have completed the Know Your Customer (KYC) verification process, representing just 0.09% of the total. The total value of assets in these dormant accounts is around 30.36 billion won, or about $21.9 million, averaging roughly $38 per account.

Corporate accounts reflect a similar trend, with only 29 out of 6,590 being active last month. While the KYC completion rate for corporate accounts is higher at 10.8%, active participation remains minimal.

The root cause of this inactivity can be traced back to 2021 when South Korea revised its financial transaction reporting laws, imposing real-name banking requirements. This regulation necessitates that crypto traders link their accounts to verified Korean bank accounts, a condition that is nearly impossible for most foreign nationals to fulfill.

Industry experts warn that the current regulatory framework not only discourages foreign investment but also undermines domestic confidence in South Korea's competitiveness as a crypto hub. There are indications that local investors are shifting assets to offshore platforms to bypass these restrictions.

For international investors, the report highlights the structural difficulties in accessing Korean exchanges. The low KYC completion rate is indicative of the barriers rather than a lack of interest. Lawmakers, aware of these challenges, are facing pressure to consider regulatory adjustments that could facilitate broader foreign participation in the market.