Korean Exchanges Lose 35% of Deposits Amid Overseas Competition

Korean cryptocurrency exchanges have been losing market share and deposits due to the lack of investment options and high fees. According to a recent survey, the combined market capitalization of Korea's exchanges fell by 33% in the first half of 2026, with a drop of 28.3 trillion won. Won-denominated deposits also sank by 35%, or 2.9 trillion won, with average daily trading volume down 44%. The decline in deposits is largely due to overseas platforms offering more diverse and attractive investment options, such as perpetual futures contracts with high leverage.

One such product, the KORU ETF, has been particularly popular among Korean traders. Binance launched a KORU product with 20x leverage on June 22, which was later increased to 50x four days later. This allows traders to potentially bet up to 150 times the daily move of the Kospi index. However, these platforms operate outside the reach of South Korea's investor protections, leaving traders vulnerable to significant losses.

Tiger Research and Chainalysis tracked roughly 120,000 Korea-linked wallets and estimated that about 700 trillion won, or $530 billion, left domestic exchanges between 2021 and 2026. Outflows reached around $120 billion in 2025 and were projected near $52 billion this year. Analyst Park Sung-jae noted that investors are leaving due to the diverse investment methods foreign crypto exchanges offer, which include futures and leverage, while spot trading is the only option in South Korea.