South Korea has a long history of early adoption of new technologies. This is also reflected in the Korean interest in cryptocurrencies. South Korea is the third largest market for cryptocurrencies and the Korean Won(KRW) is among the top five currencies traded for Bitcoin.
As the crypto craze has risen and ebbed, the government has also taken note of the emerging industry and introduced regulations to address the risks associated with cryptocurrency trading.
Therefore, the Electronic Financial Transactions Act was enacted to define cryptocurrencies and better regulate crypto asset service providers.
It is noteworthy that the cryptocurrency sector’s growth in South Korea is driven largely by trading activities since domestic Initial Coin Offerings(ICOs) are banned in the country and mining is not very profitable.
This, combined with the stringent licensing requirements has led to a few large Korean exchanges dominating the domestic market.
Now, let us have a look at some such cryptocurrency exchanges.
Top 6 Crypto Exchanges Operating in South Korea
South Korea has many global exchanges operating in the country though the majority of the trading takes place on Korean exchanges. Upbit, for instance, has around 80 per cent of the market share.
Upbit
Upbit is a South Korean cryptocurrency exchange launched in 2017. It is operated by the fintech company Dunamu and is the largest Korean exchange by a huge margin. It offers its users a range of over 180 cryptocurrencies for trading.
Real-name verification is mandatory for crypto trading in South Korea- a standard that Upbit also complies with. Not only that, KYC verification enables users to access higher deposit and withdrawal limits on it.
On Upbit, you can also set a second password to be used while withdrawing funds.
The Upbit exchange is known particularly for its design and usability. It has a neat interface that provides users with market data, real-time trends and charting tools.
The Upbit mobile app is available on both Android and iOS and enables 24/7 market monitoring and price checks.
Features
✔️180+ cryptocurrencies available
✔️Largest Korean cryptocurrency exchange
✔️KRW is the only fiat currency supported
✔️Available on both iOS and Android
Pros and Cons
✅Good range of coins ❌Margin trading not available
✅User-friendly interface
✅Free deposits
✅Reliable and safe platform
Trading Fees
Upbit charges a 0.25% maker-taker fee for BTC and USDT markets and a mere 0.05% fee for KRW markets.
Upbit fees explained
Why We Picked It
Upbit is a popular and well-established exchange backed by exchanges like Bittrex. It has an intuitive design and is a good option if you’re just looking to buy, trade and hold some cryptocurrencies.
Bithumb
Bithumb is a Korean cryptocurrency exchange established in 2014. This platform focuses primarily on the Korean market and provides over 200 cryptocurrencies for trading. However, for fiat currencies, only the Korean Won(KRW) is supported.
Apart from that, Bithumb also offers institutional accounts that cater to the needs of corporate investors. A defining feature of the platform is Bithumb Cash which can be used for making online and offline payments.
Further, Bithumb offers auto trading and trading bots to automatically execute trades on your behalf. It is an ISO 27001 certified exchange and has a 24/7 monitoring system in place.
Features
✔️200+ cryptocurrencies available
✔️KRW is the only fiat currency supported
✔️Bithumb Cash for online and offline payments
✔️2-factor authentication and 24/7 monitoring for security
Pros and Cons
✅Wide variety of coins ❌Lengthy verification process
✅Auto trading available
✅Supports margin and futures
trading
✅Low trading fees
Trading Fees
The maker/taker fee on Bithumb can range from 0.04% to 0.25%.
Bithumb fees explained
Why We Picked It
Bithumb has a good variety of cryptocurrencies as far as Korean exchanges go. It offers specific institutional accounts to suit the needs of corporate investors and you can use its Bithumb Cash feature to make payments with your cryptocurrencies.
Coinone
Coinone is an exchange meant for Asian territories. Almost a decade old, it promises a prudent, accurate and secure trading experience. It does due diligence before listing coins to ensure that users get only high-quality coins for trading.
Coinone also offers staking services and a VIP program with several benefits for users. Since it was founded by a former white hacker, Coinone places a lot of emphasis on security. It keeps 85% of the crypto assets in cold storage and is ISO 27001 certified. Coinone also conducts regular pen tests with the help of Theori to check its security architecture.
Features
✔️One of the oldest Korean cryptocurrency exchanges
✔️Over 100 cryptocurrencies available
✔️VIP program for users
✔️Cold storage and pen tests for security
Pros and Cons
✅Decent cryptocurrency selection ❌Insufficient user guides
✅Simple user interface ❌No demo account
✅NFT marketplace
✅Instant deposits and withdrawals
Trading Fees
Coinone charges a flat 0.2% fee for transactions. However, VIP users get additional benefits and therefore, pay a lower fee than regular users.
Coinone fees explained
Why We Picked It
Coinone is an exchange that has been designed keeping in mind the needs of cryptocurrency traders in Asia. It vets the coins before listing them to minimize the possibility of scam coins being listed on the platform. Further, deposits and withdrawals are nearly instant if you have a Korean bank account.
Korbit
Korbit has been around since 2013 and was the first exchange to introduce BTC/KRW trading in South Korea. Along with a wide variety of cryptocurrencies, it also offers some good staking opportunities for users.
On Korbit, you can automate your trades and even set up recurring buy for your virtual assets. It also runs a referral program where you can BTC in rewards for inviting a friend to Korbit. The platform holds events such as roulettes daily where you can participate and get a bonus every day.
In a move different from other cryptocurrency exchanges, Korbit does not charge any maker fee. Instead, it gives out a 0.01% maker incentive on all successful orders.
Features
✔️One of the first cryptocurrency exchanges in South Korea
✔️First to introduce BTC/KRW trades
✔️0.01% maker incentive on trades
✔️Has an NFT marketplace
Pros and Cons
✅Decent range of coins ❌Trading pairs are limited
✅Automated trading ❌KRW is the only fiat currency supported
✅No maker fees
✅Referral program
Trading Fees
Korbit charges a 0.20% taker fee but gives out a 0.01% incentive on maker orders.
Korbit fees explained
Why We Picked It
Korbit is an old and reliable exchange. The taker fee is fairly standard while the maker incentive is something different. It has several features such as automated trading and recurring buy that you can check out. There are also various events where you can win rewards.
ProBit Korea
ProBit Korea is the Korean subsidiary of the cryptocurrency exchange ProBit Global. While the main exchange is based out of Seychelles, ProBit Korea is located in Seoul itself. It is a good platform for basic activities such as simple crypto trading.
The sheer variety of 800+ cryptocurrencies makes it an attractive option for traders wanting to explore different coins. ProBit has a native token PROB which can be used to get discounts on trading fees and referral bonuses.
You can get as much as 10% to 30% of the referred person’s trading fees as a referral bonus depending on the amount of PROB staked by you. ProBit also has a native wallet that can be used to store cryptocurrencies.
Features
✔️More than 800 cryptocurrencies available
✔️Supports staking
✔️VIP program for users
✔️Native token known as PROB
Pros and Cons
✅Huge collection of coins ❌No lending services
✅Advanced trading tools
✅Referral program
✅Native crypto wallet
Trading Fees
ProBit charges a flat 0.2% for trading though the fee for VIP users can go as low as 0.03%.
ProBit fees explained
Why We Picked It
ProBit Korea is a good exchange if all you’re going to do is some basic crypto trading and staking. There is vast variety of cryptocurrencies to explore and a native wallet where you can store them. You can use the native PROB token to get discounts and referral bonuses.
GDAC
GDAC is a South Korean cryptocurrency exchange established in 2018. It is operated by Peertec, a leading blockchain technology company in Korea.
GDAC is a high speed platform with pretty good liquidity and a user-friendly interface. It charges a flat 0.04% fee for transactions. While you can deposit fiat currency via bank transfer on GDAC, it only supports the KRW and no other fiat currency.
The GDAC exchange takes security very seriously and keeps the majority of the assets in cold storage. It employs multi-factor authentication(MFA) and SSL encryption for account security. Users are also encouraged to set up an additional PIN or other authentication measures for additional security.
Features
✔️Operated by Peertec
✔️KRW is the only fiat currency supported
✔️MFA and SSL encryption for security
Pros and Cons
✅Competitive fees ❌No demo trading
✅High liquidity ❌No referral program
✅Cold storage for funds
✅User-friendly interface
Trading Fees
GDAC charges a flat 0.2% transaction fee for BTC and ETH markets.
GDAC fees explained
Why We Picked It
GDAC is backed by a leading blockchain technology company. It has a simple and intuitive interface that is easy to understand and use. It is a high-speed and high-liquidity platform with a simple fee structure.
Top 6 Decentralized Exchanges in South Korea
Some traders believe that centralized exchanges are an antithesis of the very idea of cryptocurrency. Therefore, they prefer to go with decentralized exchanges which allow private trading.
UniSwap
UniSwap is an Automated Market Maker(AMM) exchange for ERC-20 token swaps. Here, the need for a central order book is eliminated by the use of AMM. When a user initiates a trade, it is automatically executed by the smart contracts as per the conditions specified in them.
In UniSwap’s current v3 version, liquidity providers can concentrate their liquidity within a finite price range to ensure better capital efficiency of the asset pool. Keeping in line with this, it has three tiers of 0.05%, 0.30% and 1% for charging pool fees.
UniSwap is quite an approachable platform as far as decentralized exchanges go. Therefore, people of all experience levels would find it easy to use. You just need a cryptocurrency wallet compatible with the exchange and you are good to go.
Features
✔️Runs on the Ethereum chain
✔️Utilizes the AMM protocol
✔️Three-tiered fee structure
✔️Native token is called UNI
Pros and Cons
✅Privacy and anonymity ❌No vetting of coins
✅Near-instant trading ❌Costly gas fee
✅Intuitive UI
✅Works with several crypto wallets
Trading Fees
UniSwap has three tiers for pool fees- 0.05%, 0.30% and 1%. Trading pairs may fall into any of the three categories depending on the nature and risk profile of the pair being traded.
UniSwap fees explained
Why We Picked It
UniSwap is one of the largest decentralized exchanges with high liquidity. There are a ton of ERC-20 tokens that you can swap here. You can deposit tokens into liquidity pools to provide liquidity to the platform. Further, the fees you are charged are proportionate to the nature of the pair you’re trading.
PancakeSwap
PancakeSwap is another Automated Market Maker exchange. However, it is not an Ethereum-based but a BNB Chain-based exchange. It is used primarily for BEP-20 token swaps though a few ERC-20 tokens are available as well.
Like other food-based exchanges, PancakeSwap’s native token is called CAKE. This token is majorly used to govern the network as CAKE holders get to vote on proposals for the development of the network.
The use of the BNB Chain ensures that traders don’t have to pay expensive gas fees on PancakeSwap. A simple flat fee of 0.25% is charged here and most of it is distributed among the liquidity providers.
PancakeSwap is a secure platform which has been audited by firms like Certik and Snowmist which have given it a positive rating. However, like other decentralized exchanges, the major part of the responsibility of ensuring the security of your assets is in your hands.
Features
✔️Runs on the BNB Chain
✔️Utilizes the AMM protocol
✔️Native token is called CAKE
✔️Dedicated syrup pool for CAKE staking
Pros and Cons
✅Ingenious product suite ❌No customer support
✅No KYC verification ❌Scams and phishing attempts
✅Staking opportunities
✅Community governance
Trading Fees
PancakeSwap charges a flat fee of 0.25% per transaction. The majority of this is given to liquidity providers as a reward.
PancakeSwap fees explained
Why We Picked It
Pancakewap is an innovative exchange with an attractive and cute design and a product suite worth exploring. You don’t need to submit any kind of identifying information here and can start trading simply by connecting your crypto wallet.
dYdX
dYdX is an Ethereum-based exchange primarily for perpetual trading. It is also a platform that runs on smart contracts thus, eliminating the need for intermediaries to facilitate trades. dYdX allows cross-margining, permissionless trading and provides up to 25x leverage.
dYdX encourages traders to use the platform by giving out rewards for active trading on the platform. There is also a safety pool wherein users can receive continuous rewards depending on the amount staked by them.
Also, dYdX has managed to reduce fees and nearly eliminate gas fees by moving to a Layer 2 solution. It is quite a mobile-friendly exchange that can be used from any device, whether Android or iOS.
Features
✔️Runs on the Ethereum chain
✔️Focuses on perpetual trading
✔️Safety pool for continuous rewards
✔️Native token is DYDX token
Pros and Cons
✅Great leverage ❌Limited pairs for margin trading
✅Supports cross-margining
✅Negligible gas fees
✅No fee for low-volume trades
Trading Fees
In a different move from other exchanges, dYdX charges no maker or taker fee on transactions up to $100,000 in order to encourage trading on the platform
dYdX fees explained
Why We Picked It
dYdX is great if you want to trade perpetuals without giving out your identifying information. It has dynamic interest rates, very low fees and no problems of expensive gas fees.
Curve Finance
During the “DeFi year” of 2020, a decentralized exchange was launched with the purpose of providing liquidity for stablecoins. This exchange is Curve Finance. Apart from maintaining self-custody, Curve Finance users benefit from the low slippage on the platform
It has several permissionless pools which can be customized by the creators as per their requirements. Curve Finance’s lending pools can get you some good interest while its metapools are great for listing less liquid assets.
Further, Curve Finance is available on most Ethereum Virtual Machine(EVM)-compatible chains such as Polygon, Avalanche, Arbitrum, Optimism and Moonbeam.
Features
✔️Developed on the Ethereum network
✔️Provides liquidity for stablecoins
✔️Native token is called CRV
Pros and Cons
✅Programmable liquidity pools ❌No mobile app
✅Works with multiple chains ❌Not suitable for beginners
✅Stable platform
✅Low slippage
Trading Fees
The fees on Curve Finance pools can be anywhere between 0.04% to 0.4%.
Curve Finance fees explained
Why We Picked It
Curve Finance is a no-nonsense platform with a minimalist design. It is worth checking out if you want to trade in stablecoins. You can use it with any EVM-compatible chain and earn good interest via its liquidity pools.
DODO
DODO is an Ethereum-based decentralized exchange that has replaced the traditional Automated Market Maker model with the Proactive Market Maker(PMM) model. This helps it minimize impermanent loss and calculate an ideal market price with the help of oracles.
There is a mechanism called Crowdpooling on DODO which helps users create and maintain highly liquid capital pools and provide assets at a low cost. Further, with the DODO Vending Machine and private pools, liquidity providers can build liquidity markets that have pricing set as per their needs.
Features
✔️Developed on the Ethereum network
✔️Utilizes PMM protocol
✔️Native token is DODO Coin
✔️Easy listing of coins
Pros and Cons
✅Cross-chain trading ❌Does not support any fiat currency
✅Freedom to create liquidity
market
✅No impermanent loss
✅NFT Vault
Trading Fees
As explained by one of its co-founders, the basic fee on DODO is 0.3% per trade but the final fee comes around to be 0.6% per transaction.
DODO fees explained
Why We Picked It
DODO is a next-generation innovative platform that uses the PMM protocol to eliminate the limitations of the widely-used AMM model. The process of listing coins on DODO is simple and anyone can create a liquidity market with the DODO Vending Machine.
Balancer
Balancer is an Ethereum-based DeFi project meant for swapping ERC-20 tokens. What makes it different, however, is the automated portfolio management services it provides. Balancer has programmable multi-token pools where you can add up to 8 different assets.
Further, Balancer pools are automatically rebalanced once a token swap is completed. Its Merkle Orchard assists traders in claiming digital assets from the contracts to save on gas fees. The Balancer Gnosis Protocol helps traders get the best price by connecting with and providing access to other decentralized exchanges.
Features
✔️Developed on the Ethereum network
✔️Multi-token programmable pools
✔️Utilizes AMM protocol
✔️Native utility token is BAL token
Pros and Cons
✅Automated portfolio ❌Risk of impermanent loss
management ❌Insufficient learning guides
✅Access to ERC-20 tokens
✅Pubic and private pools
✅Automatic rebalancing of pools
Trading Fees
As the Balancer pools are customizable, the fees are decided by the pool creators and they can range from 0.0001% to 10%.
Balancer fees explained
Why We Picked It
Go for Balancer if you know your way around decentralized exchanges and can tolerate risk. It is a good option to diversify your portfolio and earn high interest via Balancer’s liquidity pools.
Is Crypto Trading Allowed in South Korea?
To understand the legal position of cryptocurrencies in South Korea, you need to know three things. Number one, the regulatory framework for cryptocurrency regulation is provided mainly by the Electronic Financial Transactions Act and the Act on Reporting and Use of Specific Financial Information.
Number two, cryptocurrencies come under the country’s Anti-Money Laundering(AML) regulations which are enforced by the Financial Securities Commission(FSC). Number three, there are no exact laws and regulations for cryptocurrency exchanges are primarily framed as per general guidelines.
Now, remember that cryptocurrencies are considered “electronic assets” and not proper currencies in South Korea. Therefore, cryptocurrencies held as investments may be subjected to capital gains tax once they are sold. The country has a 20% capital gains tax for individuals and 22% for corporations.
However, this may be subject to change as the South Korean government seeks to bring a Digital Asset Basic Act(DABA) for comprehensive regulation of the cryptocurrency sector in the country.
Till South Korea rolls out the new laws, virtual asset service providers(VASPs) operating in the country must obtain licenses by adhering to the specified standards for money laundering, fraud and reporting suspicious transactions.
VASPs have to register with the FSC and follow KYC norms including real-name verification, AML regulations and cybersecurity norms. This strict regulation is a major reason why a few large exchanges dominate the crypto market in South Korea.
Cryptocurrency Frequently Asked Questions(FAQs)
What is South Korea’s biggest Crypto Exchange?
Upbit is South Korea’s biggest cryptocurrency exchange. It is operated by the fintech company Dunamu and accounts for about 80 per cent of the cryptocurrency transactions in South Korea. Upbit has also started expanding in Southeast Asia by launching operations in Singapore and Indonesia in 2018 and Thailand in 2021.
Why is Bitcoin Expensive in Korea?
Bitcoin is expensive in Korea due to something called a “Kimchi Premium.” Basically, it refers to the difference between cryptocurrency prices on Korean exchanges as compared to their European or American counterparts. This gap is due to the fact that banks in South Korea have strict reporting requirements to adhere to when transferring funds in and out of the country.
This, combined with the popularity of cryptocurrency especially Bitcoin in the country has led to BTC prices being way higher in Korea than they are in other places. This gap is known as Kimchi Premium.
Can South Korea use Binance?
Binance used to offer its services in South Korea but it pulled out of the country in December 2020 citing low usage. However, in early 2023, reports emerged that Binance was all set to re-enter the Korean market by acquiring a majority stake in the South Korean exchange GOPAX.
It is expected that GOPAX which had suspended withdrawals from its DeFi service called GoFi will now be able to resume withdrawals and interest payments with the help of the capital from Binance.
Conclusion
The cryptocurrency sector in South Korea is full of potential. The East Asian nation is the third-largest cryptocurrency market in the world and this growth is largely driven by investments by the youth of the country. While cryptocurrency trading can bring great profits if done smartly, it is also an extremely volatile asset class.
Therefore, it is important to have proper financial knowledge about the risks and implications of investing in cryptocurrencies. Remember not to invest money that you cannot afford to lose in cryptocurrencies.