The South Korean crypto market experienced a significant contraction in the first half of 2026, according to a report from the Korea Financial Intelligence Unit and the Financial Supervisory Service. Market capitalization on domestic exchanges fell by 33% to ₩58.9 trillion, a decline of ₩28.3 trillion compared to the second half of 2025. Daily trading volume dropped by 44% to ₩3.1 trillion, while won deposits on exchanges decreased by 35% to ₩5.2 trillion.
Financial performance for the 26 registered virtual asset service providers deteriorated sharply. Combined operating profit plummeted by 78% to ₩81.6 billion, down from ₩374.8 billion in the previous period. Total sales across domestic exchanges fell by 41%. Despite the downturn, the number of eligible trading accounts saw a marginal increase of 0.4%, reaching 11.175 million, with users in their 40s becoming the largest demographic group.
Crypto assets on local exchanges faced a maximum drawdown of 69%, surpassing the performance of the KOSPI index at 55.1% and KOSDAQ at 31.8%. Regulators also highlighted liquidity risks associated with smaller assets, noting that 93 out of 234 tokens listed on only one exchange have a market capitalization of ₩100 million or less. The report indicates a continued downward trend following a decline in operating profits recorded in late 2025.
