South Korea Crypto Trading Volume Seen Falling 30% on Digital-Asset Tax, With 258 Trillion Won Wipeout

Trading volume at South Korea’s major virtual-asset exchanges could fall about 30% if taxation on crypto income takes effect next year, according to an analysis.

Maeil Business Newspaper reported on Sept. 22 that Web3 research firm Tiger Research surveyed 2,423 South Korean virtual-asset investors. It found that 73.1% said they may reduce their use of domestic exchanges after the tax is introduced.

Another 68.1% said they may increase their use of overseas exchanges. Some 64.2% said they may trade more on decentralized exchanges, or DEXs, using private wallets or through peer-to-peer transactions. A further 69.7% said they may reduce the size of their investments or stop investing altogether.

Based on those responses, Tiger Research estimated that annual trading volume at South Korea’s three largest exchanges — Upbit, Bithumb and Coinone — will fall to 601.9 trillion won ($445.6 billion) next year from about 859.8 trillion won ($636.4 billion) this year. That amounts to a drop of about 258 trillion won ($191.1 billion) in trading volume.

Exchange revenue is forecast to decline 29.5% to 728.2 billion won ($539.2 million) next year from 1.033 trillion won ($765.7 million) this year. Among investors with at least 100 million won ($74,100) in principal invested, 76.4% said they would reduce their use of domestic exchanges and increase their use of overseas exchanges or private wallets.

Under the current system, a 22% tax rate, including local income tax, will apply from Jan. 1, 2027, to annual net profits exceeding 2.5 million won ($1,850) from gains on the transfer or lending of virtual assets.