Cryptocurrency market in South Korea sees division among exchanges, with some succeeding and others struggling
South Korea's cryptocurrency exchange market is experiencing a significant split, with leading exchanges like Dunamu (operator of Upbit) and Bithumb soaring amidst IPO plans, while smaller rivals such as Coinone face financial and regulatory challenges.
Current Strategies and Status
Dunamu, with a market share of around 96% alongside Bithumb, continues to dominate the South Korean crypto market. The exchange's share prices surged by approximately 33% in 2025, peaking at 258,000 won. Upbit is leveraging strong Bitcoin interest and trading volumes to maintain its dominance, and there are speculations of an upcoming Initial Public Offering (IPO), supported by sustained investor confidence and resilient market performance. However, Upbit faces potential regulatory fines for compliance issues, underscoring ongoing regulatory scrutiny in the sector.
Bithumb, on the other hand, experienced an even greater share price increase of about 131% in 2025, reaching a peak of 275,000 won. Like Dunamu, Bithumb is benefiting from increased investor optimism tied to bullish cycles in cryptocurrencies. The exchange has announced plans to list publicly on the Kosdaq stock exchange by late 2025, signaling confidence in its consistent trading volumes and market position. Bithumb, too, is subject to intensified regulatory oversight following South Korea’s tighter enforcement post-2024 regulatory reforms.
Coinone, a smaller South Korean crypto exchange, is struggling with liquidity issues. The exchange has opted to exit its crypto holdings entirely, selling approximately $2.96 million in crypto assets to cover operational costs amid three consecutive years of losses totaling around $4.4 million. Facing a shrinking market share of roughly 3% and operational downsizing, including workforce reductions, speculation surrounds potential acquisition or leadership restructuring as the market consolidates around larger players.
Market Context and Regulatory Environment
The South Korean crypto market is increasingly polarized: dominant exchanges like Dunamu and Bithumb grow stronger by capitalizing on renewed Bitcoin rally and investor confidence, while smaller players retreat or exit. Regulatory reforms enacted in July 2024, notably the Virtual Asset User Protection Act, have imposed stricter compliance demands, disproportionately benefiting larger exchanges capable of structured asset management, while pressuring smaller rivals.
The planned IPOs indicate a strategic shift towards greater institutionalization and transparency for leading exchanges, potentially attracting more stable investment and reinforcing market leadership. However, this dynamic reflects how South Korea’s evolving regulatory framework and investor sentiment are shaping a bifurcated crypto exchange market.
The sale by Coinone is the first such action under South Korea's updated regulatory framework, introduced in May 2025. Under the new rules, exchanges can now liquidate portions of their crypto holdings to fund operations, provided the sales are pre-disclosed and limited to top-20 cryptocurrencies by market capitalization. Survival for other players in South Korea's crypto ecosystem hinges on strategic pivots or potential acquisitions.
The surge in valuations for Dunamu and Bithumb comes amid a broader resurgence in investor interest across the crypto sector. Analysts suggest Bithumb’s recent performance and consistent trading volumes provide a strong foundation for its planned Kosdaq listing. Dunamu’s continued dominance through its flagship exchange Upbit bolsters speculation around a potential IPO for the company. The decision by Coinone reveals deeper challenges that smaller exchanges may face in the evolving South Korean crypto market.
[1] South Korean Crypto Exchange Upbit Prepares for IPO [2] Bithumb Plans Kosdaq Listing for Late 2025 [3] Coinone Sells off Digital Assets to Cover Operational Costs [4] Regulatory Scrutiny Intensifies for South Korea's Leading Crypto Exchanges [5] South Korea's Virtual Asset User Protection Act: Implications for Crypto Exchanges
- South Korean crypto exchange Upbit's potential Initial Public Offering (IPO) is fueled by strong Bitcoin interest, trading volumes, and investor confidence, despite potential regulatory fines for compliance issues.
- Bithumb, another leading South Korean crypto exchange, plans to list publicly on the Kosdaq stock exchange by late 2025, demonstrating confidence in its consistent trading volumes and market position.
- Facing financial and operational challenges, Coinone, a smaller South Korean crypto exchange, has sold approximately $2.96 million in crypto assets to cover operational costs, hinting at deeper challenges for smaller players in the evolving South Korean crypto market.
- Regulatory scrutiny has intensified for South Korea's leading crypto exchanges, such as Dunamu and Bithumb, following the enactment of stricter compliance demands outlined in the Virtual Asset User Protection Act.
- The implementation of South Korea's Virtual Asset User Protection Act has allowed crypto exchanges, like Coinone, to liquidate portions of their crypto holdings to fund operations, provided the sales are pre-disclosed and limited to top-20 cryptocurrencies by market capitalization.
