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Q1 2025 South Korea Web3 Market Report: Is South Korea Still a Liquidity Exporter?
This report is authored by Tiger Research, studying the South Korean Web3 market in the first quarter of 2025, analyzing its evolution from Liquidity export to a structured industrial ecosystem, and highlighting key regulatory developments and global project initiatives.
Key Points Summary
1. The South Korean Web3 Market in Q1 2025: Still Just a Liquidity Export?
Despite active participation from retail investors and ample liquidity, the institutional infrastructure development in the South Korean Web3 market has made limited progress. Regulatory efforts prioritize investor protection over ecological development, which has delayed broader industry growth.
The two main obstacles are: 1) the association restrictions between corporate accounts and cryptocurrency exchanges; 2) the high entry threshold for obtaining a Virtual Asset Service Provider (VASP) license. Companies cannot connect their corporate accounts to local exchanges, making it legally unfeasible to convert cryptocurrencies acquired through South Korean financial institutions into fiat currency. Although some companies have turned to overseas entities as a stopgap measure, this approach carries regulatory risks and does not provide a sustainable long-term solution.
The high entry barrier for VASP registration has also become a major constraint on market development. Although it is technically feasible for small-scale operations to operate without registration, large projects always face legal and regulatory uncertainties.
These institutional constraints, combined with investor activities that far exceed the maturity of the local ecosystem, have led some projects to regard South Korea mainly as a customer acquisition channel. Against this backdrop, the external assertion that the South Korean market can simply be defined as "Liquidity export" becomes difficult to refute.
The market developments in the first quarter of 2025 indicate that South Korea has the potential to shift from a speculation-driven market to an industry revitalization-oriented market. Recent regulatory improvements, such as allowing corporate accounts to engage in cryptocurrency trading, mark substantial progress in structural transformation. Beneath the surface, global projects are steadily building local ecosystems with the support of an expanding community of builders and emerging new initiatives.
The South Korean Web3 market is at a critical turning point. As the ecosystem matures beyond an investor-driven development model, it is expected to generate greater long-term value with the dual support of institutional readiness and sustained investment interest.
2. Institutional Progress: Allowing Corporate Accounts to Trade Cryptocurrencies
In South Korea, the restrictions on cryptocurrency trading by legal entities began with the "Park Sang-ki Ban" in 2017. The policy, led by then Minister of Justice Park Sang-ki, effectively prohibited financial institutions and companies from participating in cryptocurrency trading. Although the guidelines have expired, this practice continues to this day, resulting in a dual-track system where individuals can trade within the regulatory framework while corporate investment activities are restricted.
Source: Tiger Research
To address these limitations, the Financial Services Commission (FSC) officially announced the "Roadmap for Corporate Participation in the Cryptocurrency Market" on February 13, 2025. The core highlight of this roadmap is the phased lifting of the corporate cryptocurrency trading restrictions that have been in place for seven years.
In the first phase, starting from November 2024, law enforcement agencies such as prosecutors, tax authorities, and local governments will begin to gain account access to facilitate the liquidation of seized cryptocurrencies. Non-profit organizations and exchanges are expected to follow up in the second quarter of 2025. The second phase marks a more significant shift. Starting in the second half of 2025, publicly listed companies and professional investment firms will be allowed to trade cryptocurrencies for investment and financial management purposes.
However, most Web3 projects belong to ordinary enterprises in the third stage. To obtain the qualifications of the second stage, enterprises must maintain a financial investment product balance of at least 10 billion KRW (approximately 7 million USD) according to the Capital Markets Act, and for external auditing entities, it is 5 billion KRW (approximately 3.5 million USD) — a threshold that most Web3 enterprises cannot meet. Therefore, most Web3 projects cannot immediately benefit from the new regulations. However, the roadmap still indicates a gradual relaxation of regulatory constraints. As the third stage progresses, direct market access for Web3 native enterprises will become increasingly feasible.
2.1 The positive significance of allowing enterprises to trade accounts
Web3 projects often use native token exchange services and resources. However, in South Korea, companies previously had almost no legal means to liquidate acquired crypto assets. The new policy establishes a critical entry point for companies to operate in compliance, promoting the formal development of crypto-related business activities.
This development is expected to further expand in the second half of the year, at which point trading permissions will extend to publicly listed companies and registered institutional investors. Unlike retail investors, corporate investors tend to adopt structured risk management frameworks and long-term investment strategies. Their entry into the market is expected to reduce volatility and support the sustainable development of the Korean Web3 ecosystem. Furthermore, broader corporate participation may improve the ongoing inefficiency issues in the local market—most notably the "kimchi premium."
The increase in institutional participants is also expected to broaden the scope of cryptocurrency-related financial services. Asset management companies may launch cryptocurrency funds or acquire custody service providers to offer comprehensive solutions. Fintech companies may develop corporate treasury tools that support cryptocurrency account management. These developments will help expand the Web3 industry in South Korea by strengthening the supporting service infrastructure and attracting more traditional financial institutions.
2.2 Allow potential risks of encrypting corporate accounts
The introduction of corporate accounts may have a significant impact on retail participants. From the perspective of market dynamics, a phased relaxation of regulations could lead to an imbalance of pressure between buyers and sellers. According to the FSC's corporate roadmap, regulators believe that the risks associated with corporate selling activities are relatively low. Therefore, by the end of 2025, there may only be seller Liquidity entering the market, leading to downward price pressure. Although the expected selling volume may remain moderate relative to the overall market, low Liquidity tokens may face greater volatility.
At the regulatory level, after listed companies and institutional investors fully enter the market, government efforts to ensure tax revenue are expected to strengthen. Although the taxation of cryptocurrencies has been postponed to January 1, 2027, the presidential election on June 3, 2025, may change the policy direction, which is worth close attention.
In terms of investment behavior, corporate capital may concentrate on Bitcoin. As demonstrated by the US company Strategy (formerly MicroStrategy) and Japan's Metaplanet, institutional investors tend to allocate stable assets with large market capitalization due to conservative risk management. This could lead to substantial inflows into Bitcoin or impact the altcoin market—Korean retail investors have historically been highly active in this market. Therefore, the altcoin market may face weakened interest and decreased Liquidity in the medium to short term.
3. Industrial Transformation: Strategic Layout of Global Web3 Projects
Following the US and China, South Korea has become a core strategic market for global Web3 projects. In response, numerous international teams are actively recruiting Korean talent and establishing substantial collaborations, demonstrating a strategic shift from superficial marketing to building a sustainable, builder-led local ecosystem. This long-term layout not only supports the growth of individual projects but also enhances the overall competitiveness of the Korean Web3 industry.
3.1 Project Support: Guiding industry direction through support for mature teams
Source: Avalanche Korea X
Avalanche and the TON Foundation are global project models that directly support local teams in South Korea to build ecosystems. After successfully collaborating with "MapleStory", Avalanche has expanded its partnerships with small and medium-sized projects in Korea. The team holds demonstration days every quarter to showcase available products and actively attract users, forming a feedback loop that provides substantial value to projects and participants.
The TON Foundation is taking a more structured approach by launching the "TON Society Korea Builder" program. This program includes a formal project database, a systematic support structure, and expanded network access to strengthen the local TON ecosystem in a scalable manner.
These ecosystem support strategies have produced tangible results that go beyond short-term exposure or participation metrics. Verified local developers have a more stable growth foundation, and their success stories provide clear guidance for newcomers. At the same time, these initiatives lay the groundwork for the international expansion of Korean projects.
3.2 Hackathon: Nurturing Korean Builders and Strengthening Market Potential
The hackathon hosted by XRPL Korea (Ripple) and Superteam Korea (Solana) has gone beyond a single event and has become a key turning point in South Korea's Web3 ecosystem. In March, Ripple hosted a two-day "DE-BUTHON 2025" that attracted 24 teams and 203 participants. Superteam Korea cooperated with 22 global partners to hold the "SEOULANA HACKATHON", which was attended by more than 300 people.
The scale and success of these events help to overturn the perception of South Korea as a speculation-driven market. The high participation in large hackathons reflects the presence of a strong builder ecosystem. These events have now become strategic launching platforms—providing builders with a clear market entry path, bridging the gap between prototype development and actual deployment.
By the first quarter of 2025, driven by ecological construction initiatives dominated by a global network (rather than mere capital inflows), South Korea's Web3 industry is beginning to show quantifiable progress. Strengthened collaboration with mature participants, along with developer support programs, is nurturing a new generation of local builders.
These developments mark the entry of South Korea's Web3 sector into a new momentum stage. On this basis, South Korean projects are expected to deliver substantial innovations to the global stage in the coming years.
4. From Investment-Driven to Industry-Driven: The Turning Point of the South Korean Web3 Market
In the first quarter of 2025, the South Korean Web3 market will undergo a key transformation—from an investment-driven environment to a mature industrial ecosystem. Regulatory progress, including the phased opening of corporate crypto trading accounts, lays the groundwork for structured market participation. At the same time, ongoing ecosystem-building efforts of global Web3 projects will help position the South Korean market for long-term growth.
Another important milestone is the successful completion of the first retail user real-world transaction of the South Korean central bank digital currency (CBDC) "Han River Project." At the same time, major commercial banks in South Korea began to jointly explore the issuance of a Korean won stablecoin in early April. The Bank of Korea has also indicated that it will play a more active role in future regulatory legislation.
In terms of infrastructure, the ongoing discussion about the "one exchange, multiple banks" system indicates a potential structural breakthrough. Under this model, cryptocurrency exchanges will no longer be limited to a single banking partner and can connect with multiple commercial banks. This move is expected to significantly enhance market flexibility and user access.
Overall, these developments clearly demonstrate the evolution of South Korea's Web3 sector towards a sustainable industrial ecosystem. After years of regulatory constraints and structural inefficiencies, South Korea is entering a new phase characterized by policy coordination, institutional participation, and the initial emergence of industrial-level growth.