Conflict Spills Over into the South Korean Cryptocurrency Sector
In an unexpected turn of events, all cryptocurrency exchanges in South Korea have halted operations, making it practically impossible to trade now, as noted by journalist Colin Wu. This halt, effective from December 3, 2024, has sent shockwaves through the local cryptocurrency market, causing a significant drop in trading pairs and market dynamics.
The Upbit Market Index (UMI), which reflects the market dynamics of the top 30 assets on the exchange, dropped by 13.2% on the same day. The South Korean won trading pairs on Korean exchanges experienced a sudden drop, while the price of USDT, a stablecoin, was trading at $0.89 on Upbit. Bitcoin on the largest South Korean exchange, Upbit, dropped to $79,167, and XRP on the same exchange fell to $1.89.
The sudden crash of cryptocurrency trading pairs on South Korean exchanges on December 3, 2024, was likely influenced by regulatory actions such as Google Play's removal of unregistered foreign crypto exchange apps in South Korea, including KuCoin and MEXC. These actions restricted market access and liquidity. Additionally, high-profile legal cases like Do Kwon's fraud admission and ongoing investigations may have increased market uncertainty and selling pressure.
South Korea has historically been a major player in the global cryptocurrency trading market, with platforms like Upbit and Bithumb being among the most active worldwide. However, political situations and regulatory measures often create instability in the South Korean cryptocurrency market, as evidenced by recent events.
On December 2, 2024, the daily trading volume of cryptocurrencies in South Korea reached $18 billion, exceeding the stock market's indicator by 22%. However, the state of emergency declared by President Yun Suk-Yeol in the same address, aimed at protecting the Republic of Korea from the threat of North Korean communist forces, has further escalated the market's instability.
The state of emergency transfers civilian government functions to direct military control, suspends parliament, and imposes other restrictions. The purpose also includes eliminating pro-North Korean anti-state elements. This political instability, coupled with regulatory measures, has made the South Korean cryptocurrency market a challenging landscape for investors.
