South Korea cryptocurrency exchanges struggle to survive as the bear markets continue to stretch on. Reportedly, some crypto exchanges in South Korea can barely keep their business running while others are being forced to close down.
According to local reports, big cryptocurrency exchanges in the country like Bithumb, Korbit, UPbit, and Coinone are doing better than small exchanges. However, some of these leading exchanges are considering laying off at least 10 percent of their employees to survive the crypto wave.
Reportedly, the interest in cryptocurrencies has significantly dropped since last year. The global crypto exchange market has seen a rapid decline in volume except for Bitcoin and Ethereum. Many digital assets and tokens have seen a 50 to 90 drop in daily volume.
Exchanges around the globe are experiencing these effects; however, the effects are most felt in South Korea. Tony Lyu, Korbit’s CEO said that word in the financial market of South Korea spreads quickly. He stated:
“Word spreads really fast in Korea. Once people are invested, they want everyone else to join the party. There’s been this huge, almost a community movement around this.”
While speaking to local reporters, an executive of a minor exchange in South Korea stated that the trading volume of cryptocurrencies has dropped by more than 90 percent.
This drop is attributed to the general reduction in trading volume. As it is, most crypto exchanges rely on withdrawals, transaction, and order fees within the platform. When the trading volume drops, the exchanges end up losing a substantial part of their primary source of revenue.
In addition, several industry insiders further explained South Korean crypto exchanges are struggling to stay afloat because they have slowed down their pace in solving wide industrial problems. They believe crypto exchanges should focus more on resolving liquidity and money laundering issues which will help create a healthier environment for their operations.
“The pace at which exchanges are addressing core problems this year is not as fast as previous years. The sentiment around the crypto sector remained negative when the government of South Korea refused to get involved. Now, the government is putting in efforts to improve investor protection and the structure of the local market.”
Despite the current crypto state in the country, four exchanges recently joint forces to fight money laundering in South Korea.
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