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Would Regulation Impact South Korea’s Dominance in Crypto Trading?

South Korea dominates over 20% of the world's crypto trade

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South Korea Accounts for Over 20% of Global Cryptocurrency Trading

One of the world’s most wired societies, South Korea is betting big on the cryptocurrency boom. The country is also home to 3 of the top 15 global digital-currency exchanges (by volume), namely, Bithumb, Coinone, and Coinnest. So, over 20% of global cryptocurrency trading volume happens through South Korean exchanges.

Currently, South Korea is the world’s No. 3 market in Bitcoin (BTC) trading, after the US and Japan. It also accounts for the highest trading volume for 2 of the top 5 cryptocurrencies. It is the largest exchange market for Bitcoin Cash (BCH) and Ripple (XRP), accounting for over 26% and 38% of their global trading volumes, respectively.

Here are some statistics (source: coinmarketcap.com) as of 1:47 AM Monday, 18 December 2017 (GMT-5) for the top markets for Bitcoin Cash and Ripple.

26% of Bitcoin Cash Trading

As is evident in the table above, the South Korean exchange Bithumb alone accounts for over 20% of Bitcoin Cash trading, with BCH/KRW being the most traded currency pair. Coinone and Korbit also find a place among the top 10 trading venues for Bitcoin Cash trading, accounting for 3.55% and 2.34% of trade, respectively.

38% of Ripple (XRP) Trading

Ripple (XRP) is most heavily traded on Bithumb which alone accounts for about 30% of its global trading volume. Other South Korean exchanges, Korbit and Coinone, also add 4.3% and 4.1% of XRP/KRW trading to the global volume, taking the total for South Korea to over 38%.

Self-Regulation Kicks In

South Korea’s unprecedented rise and participating in the crypto space has been raising regulators’ eyebrows. Consequently, on Thursday December 14th, the South Korean government released “emergency measures” for cryptocurrency regulation. Accordingly, South Korean cryptocurrency exchanges must now adhere to requirements such as:

  1. Keeping customers’ funds separate
  2. Providing users with thorough explanations of investment risks
  3. Confirming users’ real names
  4. Establishing an adequate anti-money laundering system
  5. Having an asset protection system such as the dispersion of cryptographic keys
  6. Increasing transparency by disclosing transaction details to the public

While the impact of these new rules on cryptocurrency trading volumes on Korean exchanges is yet to be seen, South Korea currently dominates the crypto space, after the US.

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