An overview of the current state of Korea’s blockchain ecosystem: exchanges, leading companies and banks, etc.

The large number of cryptocurrency users in South Korea has led to a rapid expansion of the domestic market, which has also led to the improvement of related policies and ecology.

By Chiko Chiko Innovation Institute

Overview of the Cryptocurrency Industry in South Korea
China is the world’s largest cryptocurrency user base, not a “percentage”. If there is a true “everyone is a cryptocurrency user” country, it would be South Korea.

With a population of 51 million, South Korea has tremendous power in the world as a producer and early adopter of new technologies, both economically and technologically, and this behavior is most evident in new areas like virtual currencies.

Despite its small size, South Korea is one of the leading countries in terms of virtual currency trading and adoption, and investing, trading and using virtual currencies is very common in the country. in 2017, South Korea already traded more virtual currencies per capita than any other country in the world alone.

The Korean nation has reached a point of frenzy when it comes to virtual currencies, and the reason behind this is by no means just because Korea is more receptive to new things. As we look down, we think we will learn about the cryptocurrency industry in South Korea and also the most real pain points of the young generation in this country.

Why are virtual currencies so prevalent in South Korea ?
With the arrival of Bitcoin and blockchain technology, Koreans are actually well prepared to embrace this new era. After all, South Korea has been using online trading for decades, and trading bitcoin is not that different from trading other currencies, stocks, or commodities.

Prior to 2017, there were very few investments where the average Korean could make huge profits in a short amount of time. Combined with rising youth unemployment and a slowing economy, many Koreans were looking for a way out of their predicament. Additionally, as Koreans began to notice the rise of Bitcoin in the fourth quarter of 2017, many began to invest without understanding the technology behind it.

Millennials in South Korea became so wild about ethereum in 2017 that many young people invested their life savings in the virtual currency, and daily trading volumes on exchanges reached fever pitch.

By the end of 2017, one-third of South Koreans had invested in virtual currencies. In its heyday, a country with less than 1% of the world’s population accounted for 30% of the world’s total virtual currency transactions. At the time, South Korea was the third largest bitcoin market in the world (behind the US and Japan) and the largest market for ethereum. At the peak of the virtual currency premium, some virtual currencies were trading at premiums of 30-50% above market prices. Such high prices in the Korean market are known as kimchi premiums, named after the famous Korean spicy kimchi.

In addition, virtual currencies emerged in the Korean economy at just the right time. On the surface, the Korean economy is strong with a growing GDP. However, Korea’s economic growth and population growth has not been like that of Japan in the 1990s or Singapore in the early 21st century. Instead, Korea’s gross domestic product (GDP) per capita has been gradually climbing while opportunities for young Koreans have stagnated.

On the one hand, youth unemployment in Korea is extremely high, and on the other hand, high housing prices in Korea are dashing young people’s dreams of buying a home on their own. While young Koreans struggle to find work, many have turned their attention to virtual currencies as a way to make quick money, and indeed some young Koreans have created wealth myths. From 2014 to 2017, virtual currencies garnered incredible returns. Those who invested successfully would promote virtual currencies and even drag their friends and family to invest with them.

With this kind of market penetration, South Korea dominates the virtual currency market and any change that affects South Korean consumers affects the entire virtual currency market. Virtual currency investors around the world are watching South Korea and studying Korean news to predict how the South Korean government will respond to the growing virtual currency market.

Simply put, there are two main reasons why the cryptocurrency industry in South Korea is so frenzied.

Korea’s unfair domestic environment and high housing prices, and the inability of the younger generation to break through the existing status class as well as the wealth class by sheer hard work, thus pinning their hopes on virtual currencies that have the potential to make them rich.

The proliferation of wealth myth stories and the exaggerated rise of the market in the cryptocurrency industry has left people with the idea of getting rich.

South Korean Policy
In July 2017, the government legalized bitcoin as a way for financial institutions to send money. Fintech companies can handle up to $20,000 worth of Korean won for bitcoin transactions. The government also required local virtual currency exchanges to operate in partnership with the Financial Services Commission (FSC) of South Korea, which appeared to have accepted and regulated bitcoin.

But in September of the same year, just as the virtual currency boom was reaching its peak, the South Korean government began cracking down on virtual currencies. In addition, in December of the same year, the South Korean government began cracking down on anonymous trading accounts on virtual currency exchanges. The virtual currency boom came to an end when the beginning of 2018 coincided with a virtual currency bear market.

While the South Korean government has been opposed to virtual currencies, they are interested in how blockchain technology can create service platforms to benefit the nation. As a result, Korean blockchain projects such as Ground X and ICON have begun working with the South Korean government to develop blockchain projects for the public sector. In addition, the mayor of Seoul has previously revealed a 5-year, $150 million plan to try to turn Seoul into a blockchain hub. This is why South Korea saw a mini blockchain boom in 2018-2019.

Then with the bitcoin bull market, South Korea saw a renewed virtual currency boom. The two major Korean virtual currency exchanges (Upbit and Bithumb) alone saw their user base increase by over 2 million in 2021.

In March 2021, South Korea introduced the Specific Financial Information Act, which requires virtual currency exchanges to obtain real-name bank accounts and meet anti-money laundering obligations. There are over 200 virtual currency exchanges in Korea. However, the vast majority of them are finding it difficult to meet the conditions set by the South Korean government in terms of regulatory approval. Many Korean banks are reluctant to work with virtual currency exchanges due to concerns about money laundering through virtual currencies. The deadline for meeting these regulatory conditions has been set for September 24, 2021. Only a handful of Korean virtual currency exchanges such as Upbit, Bithumb, Coinone and Korbit meet the requirements, and these top Korean virtual currency exchanges work with local banks such as Shinhan Bank. By then, the Korean cryptocurrency industry will surely become more and more formalized with a major reshuffle of Korean exchanges.

Nonetheless, the demand for virtual currencies in Korea is still at a very high level, and Korean investors are willing to pay higher prices for some virtual currencies than the global market value.

In essence, South Korea’s virtual currency ecosystem has become a closed system with tightly controlled access between the Korean Won and virtual currencies. South Korea is also at the forefront of the world’s formalization progress.

The Ecological Composition of the Korean Cryptocurrency Industry
The Four Major Korean Virtual Currency Exchanges
Like the two domestic giant exchanges, Firecoin and OKEx, there are four Korean exchanges that are considered to be giants. They are: UPbit, Bithumb, Coinone, and Korbit, each with its own background and characteristics. Each exchange has its own background and characteristics. As they grow, the four exchanges are constantly expanding their business and optimizing themselves for a bigger market. What are the strengths and weaknesses of the Korean exchanges compared to the giant Chinese exchanges? Let’s take a look below.


An overview of the current state of Korea's blockchain ecosystem: exchanges, leading companies and banks, etc.

Upbit, which only went live in 2017, is a global digital exchange launched by the South Korean technology company Kakao in partnership with the US-based Bibtterx exchange. The exchange is highly international, operated by a Kakao subsidiary in South Korea, and is growing rapidly in the country thanks to the strength of Kakao.

Although it sounds very international, the main users of Upbit are in fact Korean users; in addition, the financial regulation in Korea is very strict and foreigners are basically not allowed to register or withdraw cash, which is also to prevent foreign users from profiting from the “kimchi premium”.

Although Upbit is backed by the giant company Kakao and has huge traffic, it has also had its share of turmoil in the market. The news of Upbit being hacked in November 2019 shocked the cryptocurrency industry, and the hackers ended up stealing around $5,000w of ETH.

Overall, Upbit is a strictly Korean exchange that is difficult for foreign users to participate in. However, it has to be said that despite the strict regulation by the Korean government and the constant negative press, the exchange has around 1.2 million users and a daily trading volume of over $300 million.


An overview of the current state of Korea's blockchain ecosystem: exchanges, leading companies and banks, etc.

Bithumb was founded in June ’16 and is headquartered in South Korea. In its heyday, Bithumb accounted for more than 75% of the Korean market in terms of trading volume, making it the largest head exchange in the country.

However, on June 19, 2018, Bithumb was hacked and about 35 billion won (about 200 million yuan) of virtual currency was stolen, and Bithumb took steps to suspend withdrawals and deposits of virtual currency in the early hours of the 20th. At the same time, Bithumb’s chairman was also charged with market manipulation and economic fraud, which led to a slight negative impact on Bithumb.

However, it has to be said that Bithumb has a high market transparency, which allows it to meet a large demand for selling or buying; and it can enjoy very much lower fees than other exchanges when trading, which reduces the burden for many, especially contract users.

While expanding its business in Korea, Bithumb Global continues to seek larger markets around the world.


An overview of the current state of Korea's blockchain ecosystem: exchanges, leading companies and banks, etc.

Based in Seoul, South Korea, Coinone was founded in February 2014 and is one of the largest virtual currency exchanges in South Korea.

While the Coinone exchange also focuses on the Korean market, the exchange’s website is available in English and can only be traded in the Korean Won stable currency (KRW).

Unlike the above two exchanges, Coinone has not experienced any loss or hacking incidents, giving users a sense of relative security. As a long-established Korean exchange, Coinone has few coins, strict procedures, high security, also has a very high average daily trading volume, and is safe, treats customer service seriously, has an extremely good interactive interface, can meet the needs of most traders, and has almost no negative news.

If Coinone wants to expand globally one day, it may be a strong competitor for other exchanges as well; however, for now, it is more focused on the Korean market.


An overview of the current state of Korea's blockchain ecosystem: exchanges, leading companies and banks, etc.

Korbit is the first ever Korean virtual currency exchange and is considered one of the top four virtual currency exchanges in Korea. Korbit is headquartered in South Korea, received $3 million in Series A funding in August 2014, and was acquired by NXC (Nexon) for $150 million in 2017.

Korbit only supports the Korean Won and mainstream currencies. Korbit also offers a bitcoin wallet and merchant processing service through its product Korbit Pay, and currently has about 25,000 users on their trading platform and wallet service, and about 400 merchants using the Korbit Pay payment service. Meanwhile, Korbit launched an NFT trading platform in June of this year.

Korbit is more receptive to new things than traditional exchanges and is growing horizontally in all areas of the blockchain. korbit may be the first platform in Korea to create synergies between various areas.

Korean headline projects – KLAY and ICON as examples
Projects that can be considered premium or headline must have several characteristics.

A strong background or extremely strong technology level

A certain amount of users or applications

No precipitous drop in coin price or elimination of bubble after the drop, no death re-bottom

Here we use KLAY and ICON as examples to help you have a preliminary understanding of Korean quality projects and certain criteria for determining them.


Klaytn is a project of Kakao, the largest mobile platform in Korea, and its subsidiary Ground X has launched a virtual currency wallet service “KLIP” which has accumulated 100,000 users in only 21 hours and now has a total of 380,000 users. Klaytn is a service-centered blockchain platform that uses KLAY’s ecosystem to provide services to related companies. At the same time, KLAY is expanding its use significantly, centered on Kakaotalk, the most representative chat tool in Korea.

Klay’s trading volume and coin price experienced an explosive growth in February, and although it dropped more than 60% from its peak due to multiple reasons (general market conditions, panic, etc.), it did not fall with a vengeance after several shocks, which shows that the company’s operation of the coin price still exists and users still have confidence in it.

With the backing of Kakao and its own growth, Klay has become a local head project in the Korean cryptocurrency industry.


ICON is the largest public chain and cross-chain technology project in Korea, backed by a Korean consortium. The development team is all Korean (and there are many of them), and the application scenario is also Korean. The team is composed of advisors, foundation board, blockchain, AI, design, marketing, security and other departments, with a large and complete team structure. There is a strong lineup of investors including Pantera Capital, Kenetic Capital, Hashed, etc.

ICON has partnered with many Korean banks, securities companies, insurance companies, hospitals, universities, and e-commerce platforms. So, distributed application DApp services such as blockchain ID, payment and transaction can also be used across domains.

However, it has to be said that ICON’s coin price had a precipitous fall, with a one-time drop of 97.5% from the highest point; even now the market has rebounded, the price is only 10% of the high point. From a technical and application perspective, ICON is worthy of trust and investment, and is a leading project in Korea. However, purely from the perspective of the coin price, it is a bit unstable.

Top Korean Blockchain Companies and Investment Institutions
One of the main reasons many companies in South Korea are looking into blockchain is because the Korean government is updating its tax laws in 2019. As a result, companies developing blockchain technology can deduct up to 30% of their R&D expenses from their taxes. If you want to know the future of the blockchain industry in Korea, just look at a large conglomerate like Samsung. What is certain is that the development of blockchain technology in Korea will grow extremely fast.


Samsung Electronics has created a user-friendly blockchain environment that allows users to easily use blockchain applications through the Samsung Galaxy S10 and Note 10. In addition, Samsung Electronics plans to expand its blockchain services to include health and identity verification. the Galaxy S20, S20+ and S20 Ultra also support bitcoin and other virtual currencies. They have also created a secure processor dedicated to protecting users’ PINs, passwords and blockchain private keys. Samsung SDS, a subsidiary of Samsung Electronics, will work with the Seoul Metropolitan Government to develop an Information Strategy Plan (ISP) to innovate in building a blockchain city in Seoul. In addition, they have partnered with Syniverse, a communications solutions company, to develop a mobile payment platform that combines their blockchain platform Nexledger with Synverse’s blockchain solution Universal Commerce.


South Korean communications giant KT combines blockchain technology with small-scale power transaction brokerage, foreign roaming settlements and a points management system.


Kakao created Klaytn, a global public blockchain platform developed by Ground X (Kakao’s blockchain subsidiary.) Ground X also stores and verifies NFTs on its public blockchain. another Kakao subsidiary, Dunamu, is a developer of newspaper and magazine applications in Korea. Dunamu also operates the most popular stock app in Korea. in 2017, Dunamu launched UPbit, one of the largest virtual currency exchanges in Korea.

Korea Electric Power Corporation

Korea Electric Power Corporation has contracted with two Korean electricity providers to build a blockchain-powered system for trading renewable energy certificates.

Mirae Asset

Mirae Asset Financial Group, headquartered in Seoul, was founded in 1997 to provide financial services in Korea and has branches in Hong Kong, Singapore, India and the U.K. Mirae Asset Group claims to have introduced mutual funds to the Korean market in 1998 and to have maintained a 30% Mirae Asset Group claims to have introduced mutual funds to the Korean market in 1998 and to have maintained a 30% market share of these funds in 2002.

Mirae Asset Group, along with other investors, invested $93 million in Firecoin’s China-Korea Investment Fund. They have also invested in Ground X, Kakao’s blockchain subsidiary, and Coinplug, a veteran blockchain company that operates the virtual currency exchange CPDAX.

Korean Banks Using Blockchain Technology
Why are Korean banks working on blockchain technology?

As traditional financial institutions, banks are the most enthusiastic pathfinders in the blockchain space. In recent years, several domestic and foreign banks have applied blockchain technology to credit and clearing. Blockchain’s unique trust mechanism is seen by banks as a key technological breakthrough to innovate risk management and streamline transaction processes. The Bank of Korea is forming its own R&D department and investing in Korean startups based on blockchain technology.

Since Shinhan Bank officially launched blockchain technology in 2018, Korean banks have started to actively introduce blockchain technology, and the ‘blockchainization’ of Korean banks is expected to be further developed.

In 2019, five of Korea’s largest banking institutions, including Shinhan Bank, joined JP Morgan’s blockchain payment platform as part of the blockchain payment system.

Korean banks pay so much attention to blockchain, partly because of their own higher acceptance and sensitivity to new things, and partly because of the support behind the government; the deeper reason must be the country’s fear of falling behind in this silent competition and thus being behind in finance.

An overview of the current state of Korea's blockchain ecosystem: exchanges, leading companies and banks, etc.

The Bank of Korea 2021 is making huge waves in the crypto space as they are working on a Central Bank Digital Currency (CBDC) for South Korea. The Bank of Korea has reportedly been working on CBDC since 2018. in 2019, the Bank of Korea formed a legal team to advise them on how to launch CBDC, and the Bank of Korea plans to launch a CBDC pilot in 2021.

Industrial Bank of Korea (IBK)

An overview of the current state of Korea's blockchain ecosystem: exchanges, leading companies and banks, etc.

Industrial Bank of Korea (IBK) has partnered with KT, a Korean communications company, to launch a blockchain-based currency exchange service. The service aims to provide a faster and more secure form of transaction through its monitoring system, allowing IBK customers to book foreign currencies on their mobile apps or PCs before collecting them at unmanned kiosks in different locations such as hotels / airports. Blockchain technology will be used to help combat double-transactions and glitches. The service is currently being tested by IBK and its technology demo lab. They plan to commercialize the service in 2021.

IBK Bank has also partnered with Terra, a Korean blockchain startup that operates a blockchain-based payment system, to develop payment services and financial products. IBK Bank processes more funds from Korean virtual currency exchanges than any other bank in Korea.

Nonghyup Bank

An overview of the current state of Korea's blockchain ecosystem: exchanges, leading companies and banks, etc.

Nonghyup Bank is part of R3CEV, the world’s largest blockchain consortium. Nonghyup Bank is believed to be the first bank in Korea to launch a blockchain-based service. Their application allows users to receive notifications of bills related to national taxes, fines, utility bills, credit cards, and insurance premiums. The app uses key features of blockchain technology so users can make payments quickly and easily, which makes it not only transparent, but also prevents falsified records.

KEB Asiana Bank

An overview of the current state of Korea's blockchain ecosystem: exchanges, leading companies and banks, etc.

Asiana Bank is focused on becoming a data company by 2021, rather than a traditional commercial bank. Bank of Asiana is also a member of JP Morgan Chase IIN, which is part of the Technology and Services Consortium.

Bank of Asiana is also a leader in the GLN Consortium, a global financial platform that enables Bank of Asiana to easily and securely share distributed ledgers, clear accounts and remittances via blockchain.

Meanwhile, Bank of Asiana is collaborating with Koryo University to promote blockchain-based technology. They have already started cooperation to work on R&D projects and train blockchain technology experts. In addition, they will share blockchain-based data and develop blockchain-oriented financial services and products; also, Bank of Asiana is working with the Busan government to develop a new blockchain-based currency, and with highway companies to try to introduce a blockchain-powered toll payment platform, among others. To date, they have applied for over 45 patents on blockchain technology.

Shinhan Bank

An overview of the current state of Korea's blockchain ecosystem: exchanges, leading companies and banks, etc.

Shinhan Bank has partnered with Korean blockchain startup Ground X (Kakao’s blockchain division) and blockchain developer Hexlant to develop a blockchain security system. Together, they will create a private key management system (PKMS) for their banking services.

Shinhan Bank has also partnered with SEMAS, a small business market promotion company, and Directional, a Korean blockchain startup, to establish a blockchain-based loan management, distributed ledger, and lending for research. Shinhan Bank hopes to develop solutions using the latest technology such as DLT and facial recognition in order to launch its own virtual currency in the future.

Meanwhile Korea’s first CBDC (Central Bank Digital Currency) could come from the Bank of Korea, and Shinhan Bank will play an important role in the distribution and promotion of the use of digital won.

Korean Cryptocurrency Industry Media
Mainstream Traditional Media

Korean traditional media, such as Daily Economic News, MoneyToday, Seoul Economic Daily, etc. have blockchain news sections.


The main social media used by young people in Korea are Facebook, Youtube, Kakaotalk and Telegram, and KOLs active in the cryptocurrency industry usually upload content through Facebook and Youtube channels, and perform activities such as market analysis and project recommendation. Kakaotalk is comparable to WeChat in China, and is the national communication software in Korea.


Naver in Korea is similar to Baidu in China, including Naver News, Blog, Community, Cafe, Q&A, Encyclopedia, Video, etc. It is the most important way to get information online in Korea.

Korean Blockchain News Sites

There are many famous blockchain news websites in Korea, including blockchain news, forums, interviews, policies, events, education, etc. in Korea and abroad. etc.

Korean Cryptocurrency Industry Community

The Korean cryptocurrency industry community is also one of the important channels for Korean users to get information. The famous cryptocurrency industry communities include Cobak, Coinpan, Blockchainhub, Talken, Ddengle, Moneynet, etc.

Investment advice for the Korean cryptocurrency industry
First of all, it is important to understand that any investment is risky and the risk is directly proportional to the return. The cryptocurrency industry is a very risky and rewarding investment option. Many people listen to the mythical stories of wealth in the cryptocurrency industry and rush into it with the feverish fantasy of getting rich, but in reality, only about 30% of people are able to make a profit, 70% of people are losing money, and very few of them are able to get rich.

No one can make a profit right from the start unless they are genius or lucky, but most of the profits made by luck will be returned to the market in the end.

The Korean cryptocurrency industry is more barbaric than the Chinese cryptocurrency industry. Even with giant companies or strong backgrounds, many projects still experience unimaginable plunges due to market reasons or their own reasons. However, unlike most aircoins, many of these projects will “come back from the dead” and experience a sharp increase after a precipitous plunge. If you have a bullish project, it may be a good idea to diversify and ambush it at a low point.

Compared to the pure cryptocurrency industry attributes, Korean projects are especially valued for technical support. Quality coins must have technical support and basic users in place, through which many bad projects can be filtered.

If you are a Korean student or have Korean friends, you can make a good profit from the “kimchi premium” by selling through Korean and foreign exchange accounts, although the profit is much less than before as the regulation becomes stricter.

Through this article, I’m sure you have a preliminary understanding of the Korean cryptocurrency industry. Just as Bitcoin emerged to rebel against monetary hegemony, the reason why South Korea is so keen on virtual currencies is to “rebel” and break through the existing cage.

It sounds like virtual currencies are free, but there is an element of danger in that freedom; the danger is that the Korean people could lose money in the market, and the danger is that the Korean government could be affected by its own sovereignty and economic situation if it fails to take advantage of this application.

This is why, on the one hand, it seems that South Korea is very enthusiastic about this new technology, but on the other hand, the Korean virtual currency market seems closed and strictly regulated.

With the advent of the digital age, especially after COVID-19, more and more financial transactions will be conducted on virtual platforms rather than physical bank branches. Going forward, the Korean government should use this virtual currency boom as an opportunity to fast track global digital currencies, which is what many governments are doing.

If blockchain and virtual currencies do become an inseparable presence into everyday life in the future; it is possible that Korea will be one of the head countries of the technology and will be at the forefront of developed countries as a result.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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