Maybe it\u2019s the language barrier, or the walls authorities have set up to prevent money from leaving the country. But whatever it is, South Korea has built its own unique corner of the cryptoverse that\u2019s unlike anywhere else on the planet.<\/strong><\/p>\n Doo Wan Nam, a MakerDAO delegate who co-founded the research and advisory firm StableNode, laughs as he describes how crazy the intense speculation and crypto gambling can get in South Korea. He says it\u2019s a country where the price of stablecoins like Dai or USD Coin can sometimes trade sky-high because if the price starts to rise a little above the $1 peg for some reason, speculators will jump in on the momentum trade.\u00a0<\/p>\n \u201cThey sometimes trade for $20 because they don\u2019t know it\u2019s a stablecoin,\u201d he explains. \u201cThey go, \u2018You know, it was trading at $10, I bought it because it was pumping\u2026 I don\u2019t know, I didn\u2019t read, I just bought.\u2019\u201d<\/p>\n \u201cSo, I think that kind of tells you whether people knew what Terra was.\u201d<\/p>\n<\/blockquote>\n The spectacular $60-billion implosion of the Terra ecosystem<\/a>, headed up by the charismatic but ultimately deluded Korean developer Do Kwon, casts a pall over the entire ecosystem.<\/p>\n Terra is also instructive about some of the unique characteristics of the crypto culture in Korea, which places less emphasis on decentralization and puts more trust in project leaders like Kwon<\/a>.<\/p>\n Crypto is huge in this country obsessed with the latest and greatest technology. The capital city Seoul is a futuristic metropolis with massive high-res screens and blistering fast internet everywhere. One in three people in the country owns cryptocurrency, and the government has unveiled an ambitious plan to transform it into the fifth-most metaverse-friendly country in the world.<\/p>\n While English is taught in schools, few speak the language at a conversational level. This is true of many countries of course but helps explain why many Koreans aren\u2019t plugged into the same information sources as crypto fans in the United States. Forget western social media and tech giants such as Reddit, Google, Twitter and Facebook \u2014 Google Maps barely works in the country and good luck getting an Uber.<\/p>\n Instead, South Koreans access the internet, chat, search, order food and call for rides using local giants Kakao and Naver.<\/p>\n \u201cMore than 90% of Koreans are using (social media app) KakaoTalk every day,\u201d explains Sangmin Seo, who prefers to go by Sam. He\u2019s the representative director of the Klatyn Foundation, Kakao\u2019s blockchain and metaverse <\/a>offshoot. \u201cNaver is the most dominant search engine in South Korea. Google\u2019s share is about 10%\u201320% and 70%\u201380% of the market share for search engines is Naver.\u201d<\/p>\n Founded in 2011, Kakao is now the 15th-largest company in a country that\u2019s dominated by around 40 mega-corporations. Samsung, LG, Hyundai and SK together account for half the local stock market\u2019s value, while Samsung produces one-fifth of the country\u2019s exports alone.<\/p>\n Zerocap analyst Nathan Lenga has researched the South Korean ecosystem in detail and explains there\u2019s a whole other crypto world bubbling in the country. He cites blockchain-based video game and Roblox competitor Zepetto.<\/p>\n \u201cPeople haven\u2019t really heard about it, but it has 20 million users (a month), which is mindblowing,\u201d he says.\u00a0<\/p>\n \u201cThere\u2019s this whole other side of crypto that we just don\u2019t hear about that\u2019s based on Asian culture. And that\u2019s all originating in South Korea, and that\u2019s why they\u2019re such adopters \u2014 because they have their own versions.\u201d<\/p>\n Read also<\/p>\n You can now clone NFTs as \u2018Mimics\u2019: Here\u2019s what that means<\/p>\n <\/a>\n <\/div>\n Airdrops: Building communities or building problems?<\/p>\n <\/a>\n <\/div>\n<\/div>\n<\/div>\n Seonik Jeon, CEO of Financial News and founder of Factblock, says that prior to 2017, the only time South Korea made international news was when North Korea was firing missiles<\/a>.<\/p>\n \u201cHowever, as the blockchain market began in Korea, around 2017 and 2018, the amount of searching for blockchain and Korea together increased significantly,\u201d he explains.<\/p>\n Observers were fascinated by the speculative cryptomania that saw South Korea become the world\u2019s third-largest crypto market in 2017. Bitcoin sometimes traded up to 20% higher in the country (also known as the famous \u201cKimchi premium\u201d) due to capital controls introduced after the 2007\u20132008 global financial crisis to stop money from leaving the country.\u00a0<\/p>\n Many tried and failed to exploit this mouth-watering arbitrage opportunity, including crypto\u2019s current main character Sam Bankman-Fried<\/a> \u2014 but a handful succeeded.<\/p>\n Korea\u2019s relationship with crypto is tied up in its complicated relationship with gambling, which is mostly outlawed for locals (except lotteries and horse racing). A study<\/a> from the Korean Center on Gambling Problems suggests the average Korean is two to three times more likely to suffer from gambling addiction than other nationalities, and gambling is seen in a very negative light.\u00a0<\/p>\n \u201cGambling itself is illegal in Korea, so a lot of people with gambling or a speculative [nature] then tend to go into stocks or crypto,\u201d says Nam. \u201cCrypto is very fast, high risk, high reward.\u201d<\/p>\n Nam got into the space during the initial coin offering boom of 2017 after finishing his military service and joining a blockchain company.<\/p>\n \u201cIt was quite crazy. In Korea, it was very, very, highly speculative. Like, there were people literally \u2014 especially middle-aged or the elderly, who didn\u2019t know much about blockchain \u2014 they just had money, and they go to different events and say, \u2018I want to invest; how can I invest?\u2019\u201d<\/p>\n<\/blockquote>\n South Korean authorities banned ICOs toward the end of 2017, and news reports at the time claiming it was mulling a complete ban on crypto sent Bitcoin\u2019s price plunging in January 2018 from a record high in December 2017.<\/p>\n The complete ban never happened, though, and there was a huge surge in adoption in 2021 due to skyrocketing prices that put the ICO boom to shame. According to Korea\u2019s Financial Services Commision (FSC), at the beginning of 2021, just 1.9 million citizens owned cryptocurrency. By the end of the year, that number had grown to 15.25 million citizens.<\/p>\n That means one in three citizens now owns crypto, and the FSC put the country\u2019s digital asset market cap at 55 trillion won (currently $40,719,445,990), making it the seventh-largest country in the world for crypto ownership by market capitalization. Lenga attributes the surge in adoption to the 2021 bull run and the successful presidential campaign of Yoon Suk-yeol, which was strongly pro-crypto and even released a nonfungible token collection for supporters. Yoon took office in May this year.<\/p>\n Jeon, however, believes that tech-loving millennials are behind the surge.\u00a0<\/p>\n \u201cI believe the popularity of crypto in Korea is largely due to the younger generation\u2019s curiosity and willingness to try new technologies,\u201d he explains.<\/p>\n \u201cThe millennial generation here is often called the mobile native generation due to their familiarity and acceptance of technology. They are enthusiastic and passionate and ready to quickly accept and adapt to changes and development in areas such as blockchain, Web3, NFTs and GameFi.\u201d<\/p>\n Growth slowed the following financial year (to June 2022), adding just 13.2% more transactions.<\/p>\n The surge in adoption in 2021 was accompanied by new licensing laws brought in around September that effectively banned the vast majority of crypto exchanges in the country. Each provider was required to get approval from both the Korea Internet and Security Agency and the FSC, and the 63 exchanges operating in the country were cut down to just a handful, including Upbit, Bithumb, Coinone and Korbit<\/a>.<\/p>\n \u201cThey have almost complete domination over the crypto industry,\u201d says Lenga. \u201cOnce the new president starts to introduce more positive regulations and legislation in South Korea, I think that more diverse exchanges will come back. But most of them are just gone forever because they weren\u2019t allowed to survive.\u201d<\/p>\n Read also<\/p>\n Crypto in the Philippines: Necessity is the mother of adoption<\/p>\n <\/a>\n <\/div>\n Helping Ukraine without donating: Laura\u2019s DeFi staking plan<\/p>\n <\/a>\n <\/div>\n<\/div>\n<\/div>\n Although viewed as overreach by many in the crypto community outside of Korea, inside, there was more acceptance of the need to clean up the industry, which Jeon said was fiercely competitive.\u00a0<\/p>\n \u201cIn this small market, there was a competition for listing coins between exchanges, and all these scam coins were listed, which sometimes caused damage to investors,\u201d he says.\u00a0<\/p>\n \u201cMany insolvent coins that did not have proper business feasibility were sorted out. And it was an opportunity for investors to invest in a safer environment.\u201d<\/p>\n Nam puts the blame more on the banks than the government and points out that while 40 different exchanges were approved on the government\u2019s side, \u201cthe ones that passed the bank\u2019s side was only five,\u201d he says. Exchanges needed a banking partner to get fiat in and out, and few banks were willing to do business.<\/p>\n Another much-discussed regulatory issue surrounds crypto taxes, with longstanding plans to charge an additional 20% tax on crypto capital gains. Originally due to be implemented in January this year, it\u2019s been delayed to 2025 and may never happen<\/a>.<\/p>\n Subscribe<\/p>\n The most engaging reads in blockchain. Delivered once a Jeon says the government is feverishly studying the industry to understand it properly and regulate it effectively. \u201cOnce they have these regulations ready, I think many companies are ready to jump into crypto,\u201d he says.<\/p>\n With the collapse of FTX following so quickly after the fall of Terra, reports emerged this week that the FSC is looking at bringing in new regulations to keep customer deposits separate from exchange assets and to regulate exchange tokens more strictly.<\/p>\n Probably the biggest difference between the crypto community in South Korea and in the West is the lack of emphasis \u2014 and ideology \u2014 around the importance of decentralization.<\/p>\n Nam explains that while American conceptions of crypto are built around ideas of self-sovereignty and decentralization, \u201cnot your keys, not your coins,\u201d those sorts of ideas are not widely embraced in Korea.<\/p>\n \u201cWe\u2019ve done a lot of surveys and research, and most Koreans don\u2019t really access crypto from, let\u2019s say, MetaMask. Most of them just put it in the crypto exchanges, and they never withdraw to [a wallet]. In fact, we have some surveys and realize that a lot of them don\u2019t even know [private cold wallets] exist.\u201d<\/p>\n<\/blockquote>\n As a result, decentralized autonomous organizations<\/a> are an alien concept to many, and decentralized finance (DeFi) adoption<\/a> is not as widespread. This is common to the East Asian region according to recent data from Chainalysis, which shows that just 28% of transaction data is related to DeFi. That\u2019s lower than any other region apart from Eastern Europe and miles behind North America\u2019s 43.3%.<\/p>\n Nam explains that there\u2019s a level of trust and faith in centralized projects with identifiable leaders that western crypto enthusiasts simply doesn\u2019t share.<\/p>\n \u201cThey kind of believe in this having single leadership \u2014 we kind of saw with Terra as well. Despite the fact that they were very big, we saw that Do Kwon had a lot of power, and he was able to hold sway within this ecosystem, which, for more decentralized protocols, might be criticized but, at least within Korea, felt like it was very natural,\u201d he says.<\/p>\n \u201cIt doesn\u2019t really have this strong ideal of libertarianism; it\u2019s seen more as a company or another form of cooperation. And second, there\u2019s still a lot of faith in traditional institutions. Ironically, that was the reason Ripple became really popular in Korea,\u201d Nam adds.<\/p>\n \u201cFrom their side, they believe it\u2019s better to trust a centralized entity than themselves.\u201d<\/p>\n 1\/ Many are visiting Korea for @buidl_asia<\/a> @eth_seoul_<\/a> @kbwofficial<\/a>, and I frequently got this question: “Who are good Korean teams \/ leaders in the crypto space to meet?”<\/p>\n There are many interesting teams, but here are 24 you should definitely meet or at least learn of 👇<\/p>\n\n
![\"Evening](\"https:\/\/cointelegraph.com\/magazine\/wp-content\/uploads\/2022\/11\/Evening-in-downtown-Seoul.jpg\")
South Korea technology<\/h2>\n
![\"Dr.](\"https:\/\/cointelegraph.com\/magazine\/wp-content\/uploads\/2022\/11\/Dr.-Sangmin-Seo-from-metaverse-blockchain-Klatyn.png\")
\n Features<\/span><\/p>\n
\n Features<\/span><\/p>\n2017: South Korean crypto news<\/h2>\n
![\"Seonik](\"https:\/\/cointelegraph.com\/magazine\/wp-content\/uploads\/2022\/11\/Seonik-Jeon-founder-of-Korean-Blockchain-Week-and-CEO-of-Factblock.png\")
Cryptocurrency and gambling<\/h2>\n
![\"Seoul](\"https:\/\/cointelegraph.com\/magazine\/wp-content\/uploads\/2022\/11\/Seoul-at-night.png\")
\n
Crypto bull run<\/h2>\n
South Korean crypto exchanges<\/h2>\n
\n Features<\/span><\/p>\n
\n Columns<\/span><\/p>\n![\"Doo](\"https:\/\/cointelegraph.com\/magazine\/wp-content\/uploads\/2022\/11\/Doo-Wan-Nam-from-Stablenode.png\")
\n week.<\/p>\n<\/p><\/div>\n![\"Subscribe](\"https:\/\/cointelegraph.com\/magazine\/wp-content\/uploads\/2022\/10\/reading-copy.png\")
\n<\/div>\n<\/div>\n<\/div>\n<\/div>\nKorean technology: Decentralization<\/h2>\n
\n
\n
![](\"https:\/\/cointelegraph.com\/magazine\/wp-content\/uploads\/2022\/03\/Andrew-Fenton-New-CT-Headshot-300x300.jpg\")