Korea Crypto Volume Drops 30 Percent Due to New Income Tax Rules
Tiger Research projects a 258 trillion won loss in trading volume as domestic exchange activity shifts to offshore venues.
Key points
- Trading volume at South Korea's top exchanges will fall to 601.9 trillion won next year.
- A 22 percent tax on profits over 2.5 million won takes effect in January 2027.
- Seventy-three percent of surveyed investors plan to reduce their use of domestic platforms.
Annual trading volume at South Korea's largest exchanges will likely fall to 601.9 trillion won. This represents a 30 percent reduction caused by the upcoming digital asset tax.
The total loss in trading activity is estimated at 258 trillion won. Exchange revenue is forecast to decline by 29.5 percent under this new regulatory regime.
Investors Shift Activity Offshore
Tiger Research surveyed 2,423 investors to gauge their reaction to the tax. Seventy-three percent said they may reduce their use of domestic exchanges significantly.
Ninety percent of respondents plan to increase trading on overseas or decentralized platforms. This shift aims to avoid the reporting requirements associated with local brokers.
Investors with high principal balances show the strongest intent to leave. Seventy-six percent of those with 100 million won in assets will move offshore.
Tax Thresholds And Rates
A 22 percent tax rate applies to net profits exceeding 2.5 million won. This rule takes effect on January 1, 2027, for virtual asset gains.
The tax covers income from transferring or lending digital assets. Investors must report these gains to authorities under the new framework.
Market Revenue Forecasts
Exchange revenue will drop to 728.2 billion won next year. This figure is down from 1.033 trillion won in the current period.
The decline in volume directly impacts the fee structures of major platforms. Upbit, Bithumb, and Coinone face the steepest financial reductions.
