South Korea is one of the most active crypto trading markets in the world, known for the "Kimchi premium" phenomenon. We tested exchanges for KRW deposit support, FIU compliance, trading volumes, and available cryptocurrencies.
South Korea is one of the world's biggest crypto markets by trading volume, with over 10 million active traders. Regulation is handled by the Financial Services Commission (FSC) and the Financial Intelligence Unit (FIU) under the Virtual Asset User Protection Act, which came into effect in 2024. This law introduced comprehensive investor safeguards including mandatory insurance and reserve requirements for exchanges.
**How Fees Compare**
Korean exchanges are competitively priced, but traders should be aware of the "Kimchi premium," where crypto prices run 1-5% higher than global rates due to capital controls. Upbit dominates the market with over 80% market share and charges just 0.05% per trade. Bithumb charges 0.04% maker and 0.06% taker fees. Korbit and Coinone charge 0.1-0.2%. Depositing Korean won via bank transfer is instant and free on all major platforms. Access to international exchanges is restricted.
**Staying Safe as a Trader in South Korea**
- Only use FIU-registered exchanges with a verified real-name bank account
- South Korean regulations require you to link your exchange account to a verified bank account at a designated partner bank
- Upbit is partnered with K-Bank, Bithumb with NH Bank, and Korbit with Shinhan Bank
- Consider adding Kakao or Naver authentication on top of standard two-factor verification
- Korean exchanges are legally required to hold at least 80% of all customer assets in cold storage
**What Sets These Exchanges Apart**
Upbit lists over 200 KRW trading pairs with instant deposits, making it one of the most liquid local exchanges anywhere. Bithumb offers a professional-grade trading interface with detailed charting tools. South Korea's unique "travel rule" system (VIASP) ensures that transfers between exchanges are fully compliant with international standards. Korean exchanges are also among the few in the world that offer real-time won settlement.
**The Tax Situation**
South Korea has repeatedly postponed its planned 20% crypto capital gains tax on profits exceeding KRW 2.5 million. The latest delay pushes implementation to 2027. For now, crypto trading profits are effectively tax-free for individual investors in South Korea, though this will change once the new rules take effect.
Crypto Regulations in South Korea
South Korea regulates crypto through the Korea Financial Intelligence Unit (FIU) under the Act on Reporting and Use of Specific Financial Transaction Information. The Virtual Asset User Protection Act (2024) requires exchanges to store 80%+ of customer assets in cold storage, maintain insurance against losses, and implement market surveillance systems. Only exchanges partnered with real-name verified Korean bank accounts can offer KRW trading. Crypto gains above ₩2.5 million are subject to a 20% tax (implementation repeatedly delayed, currently set for 2027).
Frequently Asked Questions
Is crypto legal in South Korea?
Yes. Crypto is regulated under the Virtual Asset User Protection Act (2024). All exchanges must register with the FIU.
What is the Kimchi premium?
Crypto prices on Korean exchanges often trade 1-5% above global rates due to capital controls restricting arbitrage. This gap narrows during calm markets.
When will South Korea tax crypto?
A 20% tax on crypto gains above KRW 2.5M has been delayed to 2027. Currently, individual crypto trading is effectively tax-free.
Can I use Binance in South Korea?
Binance does not support KRW trading pairs. Korean residents should use FIU-registered local exchanges for legal compliance.
Which bank do I need for Upbit?
Upbit requires a real-name verified account at K-Bank for KRW deposits and withdrawals. Other exchanges partner with different Korean banks.