Korea Is a Crypto Trading Giant and a Crypto Business Desert

South Korea is one of the most crypto-obsessed markets on earth — and one of the worst places to actually run a crypto business. That's the verdict of The Block's Global Crypto Competitiveness Index (GCCI) 2026, which ranks Korea 12th out of 15 jurisdictions for building and capitalizing a crypto company. Korea sits 6th for market demand but dead last for cross-border openness, according to the index's country profile.

The index scores 15 jurisdictions across 17 factors grouped into four categories: market context, industry, regulation, and cross-border openness. In this year's edition, The Block deliberately shifted weight away from raw trading volume toward licensing regimes, banking access, custody, and the ability to operate internationally — conditions that matter more to businesses than to speculators.

The podium

The United States, the United Arab Emirates, and Switzerland form a tight podium at the top. The US brings deep liquidity and a massive customer base; the UAE offers the strongest regulatory framework for establishing businesses, with robust cross-border infrastructure; Switzerland ranks second for industry, regulation, and cross-border access, though its domestic market is relatively small.

Capital is already following the ranking. As of September 2026, more than 40% of crypto venture deals have come from one of the three podium countries, according to the report — and of the roughly $10 billion raised this year, more than 67% flowed into one of the three.

The demand machine

Korea is nearly the mirror image of Switzerland. It scores well on product permissions and operating conditions, but ranks 13th for domestic regulation and last for cross-border openness, according to the profile — dragged down by strict foreign exchange restrictions, effectively zero local primary token issuance, and aggressive Travel Rule enforcement.

The demand side of that paradox goes back to 2017. Korea entered that year with one of the world's highest smartphone ownership and broadband penetration rates, a retail investor base already comfortable with speculative KOSDAQ small caps, and two decades of experience treating digital items as liquid assets through online gaming economies — real-money trading for in-game goods on marketplaces like ItemBay had been running since 2001. The Foreign Exchange Transactions Act made moving money abroad costly, keeping retail capital in domestic venues.

The result was explosive. By May 2017, Korea was the world's largest ether market, with roughly $335 million in daily volume and a 38% global share, according to the profile. By December, won-denominated trading accounted for about 21% of global crypto volume, and an estimated 2.5 million Koreans held virtual currencies. On some days, Bithumb's trading volume exceeded that of KOSDAQ, Korea's tech-focused growth market — and the exchange's 2017 revenue rose 171-fold from the prior year. A December 2017 survey of 941 office workers found 31.3% had invested in virtual currencies, with an average position of about 5.56 million won (around $5,000), and 54.2% giving "the fastest way to make money" as their reason.

A decade of containment

The government's answer was containment. In late September 2017, the Financial Services Commission banned all forms of token issuance, with Vice Chairman Kim Yong-beom saying money was flowing in an unproductive and speculative direction, according to the profile. Korean teams simply incorporated foundations in Singapore and Switzerland and kept operating from Seoul.

In January 2018, Justice Minister Park Sang-ki said a bill to ban domestic trading was being prepared; bitcoin fell more than 10% on Korean exchanges that day. The presidential office walked it back within hours, and by mid-February the government confirmed exchanges would be regulated rather than closed — with a real-name trading account system and, eventually, banks acting as the gatekeepers deciding which exchanges could take won deposits.

Upbit, launched in October 2017 by Dunamu — the operator of Kakao's social trading app — thrived under that structure. With a Bittrex partnership supplying its BTC, ETH, and USDT markets, more than 100 altcoins listed in won from day one, and logins through KakaoTalk, it became the world's largest exchange by 24-hour volume within about two months of launch, processing $7.57 billion in a single day in January 2018, ahead of Binance and Bithumb, according to the profile.

The legacy of that era is the ranking Korea holds today: enormous retail appetite, channeled through a domestic market the state built a moat around. A decade of containment-first policy, as The Block puts it, is now slowly giving way to institutional access — but the cross-border walls remain the country's defining crypto feature.

Crypto prices move fast — figures cited above reflect the source's reporting at publication time, not live market data.

Written by the BidAsk Newsroom. Based on reporting from the sources below.