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The number of foreign nationals with accounts at domestic cryptocurrency exchanges has reached 560,000, but only 90 of them are active users, data showed Sunday. The accounts are believed to have been opened before foreign investment was effectively banned in 2021.
According to data from the Financial Supervisory Service, the five major cryptocurrency exchanges — Upbit, Bithumb, Coinone, DigitalX and GOPAX — had a combined 566,352 accounts held by foreign nationals. The data was obtained and released by Rep. Park Sang-hyuk of the ruling Democratic Party of Korea.
Of these, only 517 foreign-held accounts, or 0.09 percent, had completed know-your-customer verification. The number of active accounts that recorded at least one trade, staking transaction, deposit or withdrawal last month was even lower, at just 90, or 0.01 percent.
Bithumb had the largest number of foreign-held accounts, at 484,846, followed by Upbit with 42,449, Coinone with 15,914, DigitalX with 11,622 and GOPAX with 11,521.
Korea effectively barred foreign nationals from investing through domestic crypto exchanges following a 2021 revision to the Act on Reporting and Using Specified Financial Transaction Information. While crypto trading is allowed through real-name-verified bank accounts, foreign nationals have been generally unable to obtain such accounts amid concerns over money laundering and illegal foreign exchange transactions.
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Still, foreign users held a sizable amount of assets on the five major crypto exchanges, including 2.58 billion won ($1.86 million) in cash deposits and 30.36 billion won in crypto assets.
Industry officials are calling for regulatory changes, saying greater participation by foreign investors could lead to more efficient price discovery and strengthen the competitiveness of Korean crypto exchanges.
They also argue that the asymmetric structure — under which Korean investors can use overseas exchanges while foreign investors cannot access Korean exchanges — undermines the competitiveness of the domestic crypto industry.
“Korea is the only country that prohibits foreign residents legally residing in the country from trading,” an industry official said. “Korean exchanges have significantly strengthened their anti-money laundering capabilities. It is no longer reasonable to bar foreign investors on anti-money laundering grounds.”
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Source: www.koreatimes.co.kr