Behind the frenzy: Data reveals the true face of South Korea’s crypto market
Original author: Karen, Foresight News
This week, the Financial Information Analysis Institute of the Korean Financial Services Commission released a survey report on virtual asset companies for the first half of 2023. The report is 20 pages long and targets 35 virtual asset companies (26 exchanges and 9 wallets and custodians). , to present the current situation of South Korea’s virtual asset market.
This report was written by the Korea Financial Intelligence Analysis Institute based on information submitted by 35 virtual asset companies and is relatively true. Foresight News has compiled and summarized ten key points for readers to gain a glimpse into the real status of the Korean virtual asset market and the asset preferences of Korean users.
TL;DR：
In the first half of the year, the average daily total trading size of South Koreas 26 exchanges was US$2.168 billion, down 1.3% month-on-month. Among them, the Korean won market occupies an absolutely dominant position, and the trading volume in the non-Korean won market is negligible.
The total operating profit of the 26 virtual asset exchanges was US$170 million, an increase of 82% month-on-month.
The total number of employees in the 26 exchanges is 1,915, and the proportion of part-time employees accounts for 32.8%.
The market value of domestic virtual assets in South Korea is approximately US$21.2 billion, an increase of 46% from the end of last year.
XRP is very attractive to Korean users, second only to Bitcoin.
The 26 exchanges have a total of approximately 9.5 million registered users (including double counting) and 6.06 million trading users.
73% of Korean users hold virtual assets below US$747, and 0.7% of Korean users hold virtual assets above US$74,600.
Virtual asset wallet and custody business: Operating profit in the first half of the year was US$2.61 million, a decrease of 71% month-on-month.
1. The average daily trading size of Korean exchanges in the first half of the year was US$2.168 billion, a month-on-month decrease of 1.3%.
In the first half of 2023, the average daily trading size of 26 virtual asset exchanges was 2.9 trillion won (approximately US$2.168 billion), a decrease of 1.3% year-on-year in the second half of last year.
Among them, the trading volume of the Korean won market occupies an absolutely dominant position, and the trading volume of the token market (non-Korean won market) is negligible. There are 5 exchanges with average daily trading volume in the token market below 1 million won (US$747).
As can be seen from the monthly average daily transaction size chart below, after February this year, the trading volume of Korean exchanges has shown a continuous downward trend.
Change trend of average daily trading size of Korean exchanges from October 2022 to June 2023 (statistics by month)
2. The total operating profit of the Korean Exchange was US$170 million, an increase of 82% month-on-month.
In the first half of the year, the total operating profit of 26 virtual asset exchanges was US$170 million, an increase of 82% from US$93 million in the second half of 2022 (operating profits in the fourth quarter of 2022 were too low).
Operating profit trends summarized by quarter (purple represents won market, green represents token market)
As can be seen from the table above, the operating profit of the Korean won market occupies an absolutely dominant position. Among the 21 exchanges operating the token market, 10 exchanges have a token market transaction fee of 0, and 18 are in a state of complete capital loss.
The handling rate of Korean exchanges ranges from 0.01% to 0.25%, with an average handling rate of 0.15%, a decrease of 0.01% compared to the second half of 2022, of which the average handling rate of the Korean won market is 0.15%.
3. Korean won deposits on exchanges were close to US$3 billion, an increase of 11% from the end of last year.
As of the end of June, Korean won deposits on exchanges stood at 4 trillion won (nearly US$3 billion), an increase of 11% from the end of last year.
Daily average Korean won deposit size summarized by month (unit: trillion won)
4. The total number of employees in the 26 exchanges is 1,915, and the proportion of part-time employees is 32.8%
The average number of employees at the 26 exchanges is 74, and the total number of employees is 1,915, a decrease of 178 compared to the end of last year. Among them, there are 269 employees related to anti-money laundering (AML), accounting for 13.5%. In addition, the proportion of part-time workers accounts for 32.8%.
Status of exchange employees (green represents the data as of June 2023, purple represents the data as of the end of November 2022, the left chart is the average number of exchange employees and the number of AML-related employees, the right chart is the proportion of AML employees and Proportion of part-time employees.)
5. A total of 622 virtual currencies are listed on 26 exchanges
After excluding duplicate currencies, 26 exchanges listed a total of 622 virtual currencies, which is not much different from the second half of last year. The largest number of virtual assets listed on a single exchange platform is 236, and the lowest number is 3. The average number of tokens supported by the Korean won market is 163, and the average number of token markets supported is 28.
Among them, there are 366 virtual assets listed on only one Korean exchange, accounting for 59%. The proportion of new listings and delistings has changed significantly. Specifically, in the first half of 2023, Korean exchanges added 169 tokens (including duplicates), a month-on-month increase of 128%, and 115 tokens were delisted. (Including duplicate items), a month-on-month increase of 47%. 66% of the delisted currencies were only listed on one Korean exchange.
The main factors to consider when delisting tokens include project risks, investor protection risks, market risks and technical risks, etc.
6. Which tokens do Korean users prefer?
The market value of domestic virtual assets in South Korea is approximately US$21.2 billion, an increase of 46% from the end of last year. The market value of domestic virtual assets in South Korea given by the Korea Financial Analysis Institute is defined as: the sum of the number of each virtual asset held by Korean exchanges multiplied by the market price of the relevant assets.
Among the top ten virtual assets in South Korea by market value, 6 virtual assets are among the top ten global virtual assets in market value, including BTC, XRP, ETH, DOGE, ADA and SOL. The asset preferences of Korean users can be seen from the table below. It is worth mentioning that XRP is very attractive to Korean users, second only to Bitcoin.
From left to right, the top ten asset classes in global and Korean virtual asset markets by market value (unit: trillion won)
From left to right, the top ten asset classes by market capitalization in the global, Korean won market, and Korean token market (unit: trillion won)
Among the top ten assets by market capitalization in the Korean token market, except for the W** asset, the remaining nine assets are all assets listed on a single exchange.
7. The amount of virtual asset transfers between Korean exchanges is US$22.2 billion, and the proportion of applying Travel Rule rules is 22%
In South Korea, exchange users are required to provide sender and receiver information when transferring virtual assets worth more than 1 million won ($746) between Korean exchanges (implemented starting March 25, 2022). External transfers to foreign exchanges or personal wallets in Korea can only be carried out if the sender and receiver are the same and have independently pre-registered the wallet address through identity verification, etc.
In terms of transfers between South Koreas reported exchanges, the amount of virtual asset transfers by exchanges was US$22.2 billion, a decrease of 3% compared to the second half of last year. Among them, the amount of transfers applying Travel Rule rules was approximately US$4.9 billion.
Regarding transfers to Korean foreign exchanges and personal wallets, based on pre-registered (whitelisted) overseas exchanges or personal wallet addresses, the total size of a single transfer exceeding 1 million won is US$16.5 billion. It is speculated that this part of the transfer may be To conduct arbitrage transactions, etc.
8. Exchange users: 9.5 million registered users, 6.06 million trading users
In terms of users, there were a total of approximately 9.5 million registered users on the 26 exchanges in the first half of 2023 (including double counting and excluding dormant accounts), a decrease of 19% month-on-month. This may be due to the increase in dormant accounts and the conversion of multiple accounts into a single account.
However, the actual number of trading users on the exchange was 6.06 million (including double counting and excluding dormant accounts), a decrease of 3% month-on-month. Among them, there were nearly 5.97 million users in the Korean won market and only 95,000 users in the token market.
In terms of age groups of Korean users, the largest number of users are in their 30s, accounting for 1.15 million, accounting for 30%, followed by those in their 40s (29%) and 20s (19%). In addition, among Korean trading users, there are 4.14 million men, accounting for 68%, and 1.92 million women.
9. 73% of Korean users hold virtual assets below US$747, and 0.7% of Korean users hold virtual assets above US$74,600.
In terms of users’ virtual asset holdings, 67% of users hold virtual assets of less than 500,000 won (US$373), and 73% of users hold less than 1 million won (US$747) of virtual assets. The proportion of users holding more than 10 million won (US$7463) accounted for 8%, and the proportion of users holding more than 100 million won (US$74,600) in virtual assets was 0.7% (44,000).
10. Current status of virtual asset wallet and custody business: Operating profit in the first half of the year was US$2.61 million, a decrease of 71% month-on-month.
The total custody value of 9 virtual asset wallets and custody companies is $2.313 billion, an increase of 29% from the end of 2022. Among them, by user category, the custody value of legal persons reached 2.239 billion U.S. dollars (the average virtual asset custody value of 122 companies was 18 million U.S. dollars, and 0 for 60 companies), and the custody value of individuals was approximately 0.1 trillion won (303,000 The average holding amount of individual users is US$268); by service category, the custody value of the custody business reached US$2.164 billion, and the value of wallet service deposits was US$75 million.
In addition, the operating profit of nine virtual asset wallet and custody companies was 3.5 billion won (approximately US$2.61 million), a 71% decrease from the operating profit of 11.8 billion won in the second half of 2022.
There are 272 employees working in virtual asset wallets and custody companies, including 28 AML-related employees.
source:
https://www.fsc.go.kr/no010101/80871?srchCtgry=&curPage=&srchKey=&srchText=&srchBeginDt=&srchEndDt=
