A glimpse into the daily lives of South Korean crypto investors
IGNAS said that South Korea's Bitcoin trading volume reached 20% of the world's total in 2017, and it is also the largest trading market for Ethereum.
The enthusiasm for cryptocurrencies in South Korea led to several “Kimchi premiums” between 2017 and 2018. The local Bitcoin trading price in South Korea was even 40% higher than that in the United States, attracting many illegal arbitrageurs at home and abroad.
As a result, the South Korean government implemented real-name verification (KYC) for transactions and banned initial coin sales (ICOs) in 2018, but it still failed to stop the investment enthusiasm of Koreans.
IGNUS said that Koreans pursue speed and efficiency, including getting rich quickly. However, investment channels such as stocks and real estate are not easy, so they tend to gamble.
However, South Korea's ban on gambling has also led to cryptocurrencies being seen as a way to get rich quickly.
Current state of crypto regulation in South Korea
Chain News interviewed Jake, a Korean friend, who believes that regulation is one of the important factors affecting the development of the crypto ecosystem. Starting in 2021, centralized exchanges (CEX) must register with local financial regulators and comply with security license requirements. In addition to establishing a government-approved bank account with real name before users can participate in transactions, they must also report the deposit and withdrawal records of self-hosted wallets to CEX; some CEXs even do not allow transfers from decentralized exchanges (DEX) to CEX.
IGNUS also attributed the recent closure of several CEXs to strict local regulations on crypto trading.
Why DeFi is not popular in South Korea
IGNUS discussed with two industry insiders and concluded that the stereotype that Korean crypto investors regard trading cryptocurrencies as a speculative behavior is the main reason why DeFi cannot take root in South Korea. Others include:
DeFi returns are not attractive enough for Korean investors seeking high-risk speculation
Local investors have a deep-rooted trust and reliance on CEX
The concept of self-custody is not popular, and the use of cold and hot wallets such as Metamask and Ledger is not popular
DeFi is cumbersome and mostly in English, which is a big obstacle for Korean users
He also stated that if DeFi projects want to enter the Korean market, intuitive and localized user interfaces, promotion by local KOLs and large media, and even cooperation with CEX are all solutions.
Korean crypto investors who have traded in the past few years know how to make quick money without any effort, that is, buying altcoins with great risk-reward ratios through easy-to-use CEXs. Therefore, they have no reason to use difficult DeFi tools.
Chain News interviewed Korean friend Jake, who provided other opinions:
Korean crypto investors who have traded in the past few years know how to make quick money without any effort, that is, buying altcoins with great risk-reward ratios through easy-to-use CEXs. Therefore, they have no reason to use difficult DeFi tools.
