South Korea’s economic crisis could drive crypto businesses overseas

CryptoQuant CEO warned of economic instability and called for reform of South Korea’s financial policies.

In a December 19 post on and the unattractiveness of domestic assets.

“Domestic assets, including the Korean Won, are not attractive at all,” Ju said, noting the ineffectiveness of government initiatives to keep the currency stable.

Ju noted that the government’s efforts to keep the currency stable have mostly failed, given the state of the economy. He emphasized that the problem was exacerbated by the rapidly rising exchange rate causing economic instability.

Ju also noted that the USDT value on Upbit, one of South Korea’s major exchanges, has already caught up with the IMF rate, which could be a bad sign for the South Korean economy, especially in terms of cryptocurrencies.

An important benchmark for assessing the value of a currency relative to other currencies using international financial standards is the IMF rate.

When the value of USDT, a US dollar-denominated stablecoin, is equalized to the IMF rate on local markets like Upbit, KRW is falling at an alarming rate against the dollar. This alignment between USDT and the IMF rate could be a sign of a lack of confidence in the Korean economy, as investors may use USDT or other stable assets to hedge against national currency volatility.

This could be interpreted by South Korea as a warning sign of capital flight, which is when companies and investors move their assets abroad to protect themselves from devaluation or inflation. This trend could further destabilize the local financial system and undermine the national economy, as fewer people would be willing to hold KRW.

In addition, this situation may affect international investments and trade, reducing South Korea’s attractiveness for international investors. Ju’s comments indicate growing concern about the government’s response to the crisis and its ability to stem the flow of capital out of the country.

CryptoQuant’s CEO also expressed disapproval of the government’s handling of the issue, saying that instead of ensuring that capital stays in the country, it should create an atmosphere that will encourage it to come back. Ju called for fewer restrictions and more incentives for investors to stay in Korea, saying that “the government should not forcibly retain capital that has fled abroad.”

Ju, who has been operating his company in Korea for seven years, expressed his growing dissatisfaction with the South Korean government. He concluded: “I endured this for 7 years while doing business as a local company, but now I think I should leave Korea. “This is very frustrating.” His remarks calling for reform to stem capital flight reveal a deeper concern for Korea’s economic future.

South Korea witnessed serious political unrest in December 2024 as a result of President Yoon Suk Yeol imposing martial law, which he later withdrew. As a result, the National Assembly impeached him and a hearing was held before the Constitutional Court to decide whether he would remain in office.

Financial institutions in South Korea have been greatly affected by the current political unrest. The stock market experienced fluctuations and the South Korean won lost value, mostly as a result of international investors selling local shares.

For example, the KOSPI index, South Korea’s benchmark stock index that tracks the performance of enterprises listed on the Korean Stock Exchange, fell 2.5% from December 3, the day martial law was declared, and has trended downward since then. and is currently trading at 2,435.93 as of December 19.

Source: Google Finance

Additionally, the share price of Samsung Electronics, one of South Korea’s largest companies and a global technology pioneer, is trading at 53,100 KRW, down 9.3%. The South Korean won also continued its decline, reaching a 15-month low of 1,448.9 against the US dollar.

In order to reduce risks related to the current political and economic environment, companies and individuals are considering moving their assets abroad as a result of increasing concerns about economic stability.

It’s unclear how the government’s measures will affect South Korea’s financial institutions going forward and whether additional companies like CryptoQuant will be forced to relocate to ensure their survival in a more stable environment as the country experiences political and economic turmoil.