After the chaos caused by the abrupt overnight declaration of the military takeover in South Korea, enraged citizens and lawmakers are strongly pushing for President Yoon Suk-yeol’s removal from office.
Tuesday night in Korea, Yoon declared the enforcement of martial law — the imposition of direct military control over civilian government functions — as a measure to target the opposition left-wing party’s growing criticism of the current administration.
Yoon’s martial law declaration, nullified after six hours, received fierce backlash from citizens, the left-wing opposition party, and even Yoon’s People Power Party members.
On Wednesday, a coalition of 191 lawmakers launched impeachment proceedings against the president. According to MBC News, the bill, sponsored by six political parties, is expected to be put to a vote this Friday or Saturday.
South Korea’s martial law declaration caused crypto prices to plunge on local exchanges Upbit and Bithumb, along with system outages due to spikes in traffic. While prices have recovered since then, analysts predict lingering market consequences.
“Further developments, such as potential impeachment proceedings, could introduce volatility,” said Min Jung, research analyst at Presto Research. He added that the impact, however, is expected to be limited to the domestic market and short-term volatility.
Meanwhile, Seunghwa Lee, Head of DeSpread Research told The Block that such political instability could exacerbate global market volatility in certain cryptocurrencies heavily traded in the country. Ripple XRP, a popular token among Korean traders, showed a steeper drop of 15% at the time of martial law declaration compared to other cryptocurrencies, according to CoinGecko data.
“Given the significant influence of South Korean investors, political events that dampen investor sentiment could have enough impact on global markets,” Lee said.
South Korea hosts one of the largest and most reactive crypto markets in the world. In the first quarter of this year, the country’s national currency surpassed the U.S. dollar as the most-traded currency for trading crypto. According to CoinMarketCap data, around $32.6 billion worth of crypto was traded in the country in the past 24 hours.
One analyst likened South Korea's political turmoil to the U.S. Securities and Exchange Commission's crackdown on the domestic crypto industry.
“Both are products of an ivory tower mindset—detached from reality and driven by their self-serving narratives—causing grave harm to society and ultimately leading to their own demise,” said Peter Chung, Head of Research at Presto.
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