Doom as 97% of South Korean cryptocurrency exchanges risk shutting down

A newly released report by Business Korea argues that a large number of South Korea-based cryptocurrency exchange are on the verge of closing down. The report cites low trading volumes as the reason why the exchanges could grind to halt.

“It is no exaggeration to say that 97 percent of domestic exchanges are in danger of going bankrupt due to their low volume of transactions.”

Unfortunately, the report fails to provide concrete data to back such a strong claim. One should note that most of the top 100 crypto exchanges by trading volume are South Korean-based. At the same time, one crypto exchange in the country Coinnest already closed its doors citing a decrease in trading volume.

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Due to the low trading volumes from the exchanges, crypto projects are preferring to launch their tokens on foreign exchanges. The report as that “foreign [cryptocurrency] exchanges have opened the Korean won money market to attract South Korean cryptocurrency projects.”

In addition to that, “tougher domestic cryptocurrency exchange market conditions” are not making the situation better. For instance, “investors cannot make or withdraw deposits in the Korean currency at Korean exchanges.” This motivates projects to list their coins abroad, in turn, hurting the exchange business in South Korea.