South Korean investors have always shown keen interest in cryptocurrencies. The South Korean government enacted laws for regulation of cryptocurrencies and exchanges in March 2020. During the year the crypto market was growing rapidly despite Covid-19 pandemic. South Korean people adopt new technology fast. The other attraction of crypto is its stateless nature. South Korea has a hostile neighbor. The presumed geopolitical uncertainty has enabled stateless cryptocurrencies to grow fast.
The young generation of South Korea has helped popularize cryptocurrencies in the country. Unemployment rate in South Korea is very high. In absence of normal source of earning, many youths took up crypto trading to make money.
Illicit Activities
Authorities in South Korea started detecting illicit activities linked to cryptocurrencies such as money laundering and tax evasion. The year 2020 witnessed 42% increase in reported frauds related to crypto. As a control measure the government introduced the requirement of license from the Korea Internet and Security Agency for all crypto exchanges effective September 2021.
Last month several executives of V Global were found guilty of misappropriation of USD 1.9 billion. V Global was a South Korean crypto exchange. It is reported that over 50000 investors lost their savings due to the fraud committed by the crypto exchange.
Going Forward
It is estimated that South Korea is the third largest cryptocurrency market in the world. Despite more regulation the crypto market grew to over USD 45 billion by 2021 end. The crypto providers earned over USD 2 billion net profit in the year. Reports suggest that the young crypto user generation is set to influence South Korea elections to be held in March 2022.
