Q1 2025 South Korea Web3 Market Report: Is South Korea still a liquidity export?

Author:Tiger Research

Written by Tiger Research, this report studies the Korean Web3 market in the first quarter of 2025, analyzes its evolution from liquidity exports to a structured industrial ecosystem, and focuses on key regulatory progress and global project initiatives.

Summary of key points

• From liquidity exports to industrial ecosystem: In the first quarter of 2025, the South Korean Web3 market ushered in a turning point. This market, once regarded as the "liquidity export" of global projects, is transforming into a structured self-supported industrial ecosystem.
• Impact of corporate account regulation: As part of the Financial Services Commission’s roadmap, institutional entities are gradually being allowed to trade cryptocurrency through corporate accounts.
• Ecological construction led by global projects: Avalanche, TON, Ripple and Solana are actively building long-term foundations in South Korea. Their activities have gone beyond marketing and are committed to building a developer community and hosting hackathons.

1. South Korea Web3 Market in the first quarter of 2025: Still just

liquidity exports?

Despite active retail investors' participation and abundant liquidity, the construction of institutional infrastructure in the South Korean Web3 market has been limited. Regulatory efforts prioritize investor protection over ecological development, delaying wider industry growth.

The two major obstacles are: 1) the limitations on the association between corporate accounts and cryptocurrency exchanges; 2) the high entry threshold for obtaining a virtual asset service provider (VASP) license. It is legally unfeasible for companies to access company accounts to local exchanges, which makes it legally unfeasible to convert cryptocurrencies acquired in operations into fiat currencies through Korean financial institutions. While some businesses turn to overseas entities as a stopgap measure, this approach poses regulatory risks and fails to provide sustainable long-term solutions.

The high entry threshold for VASP registration has also become the main constraint on market development. While small-scale operations do not require registration is technically feasible, large projects always face legal and regulatory uncertainty.

These institutional constraints, coupled with investor activities that far exceed the local ecological maturity, have led some projects to regard South Korea as a customer acquisition channel. Against this background, the outside world's assertion that the Korean market is simply defined as "liquidity export" has become difficult to refute.

Market development in the first quarter of 2025 shows that South Korea has the potential to shift from a speculative-driven market to an industrial revitalization-oriented market . Recent regulatory improvements, such as allowing corporate accounts to trade in cryptocurrencies, mark substantial progress in structural change. Under the appearance, global projects are steadily building local ecosystems with the support of the expansion of builder groups and the emergence of new initiatives.

The Korean Web3 market is at a critical turning point. As the ecosystem gradually matures beyond the investor-driven development model, greater long-term value is expected to be generated under the dual support of institutional readiness and continued investment interest.

2. Institutional progress: Allowing corporate accounts to conduct

cryptocurrency transactions

In South Korea, restrictions on cryptocurrency transactions in legal entities began with the 2017 "Park Sang Ki ban". The policy led by then-Legal Minister Park Sang-ki essentially prohibits financial institutions and businesses from participating in cryptocurrency transactions. Although the guidelines have expired, this practice has continued to this day, forming a dual-track system in which individuals can trade within the regulatory framework while legal entities are restricted in investment and financing activities.

Source: Tiger Research

To resolve these restrictions, the Financial Services Commission (FSC) officially released the "Roadmap for Enterprise Participation in Cryptocurrency Markets" on February 13, 2025. The core highlight of the roadmap is the phased lifting of the seven-year limit on corporate cryptocurrency transactions.

• Phase 1 (from the second quarter of 2025): Open accounts to law enforcement agencies, nonprofit organizations and cryptocurrency exchanges for asset clearing purposes only
• Phase 2 (starting from the second half of 2025): Allow listed companies and registered investment companies to conduct transactions
• The third stage (medium and long-term): Fully open the market to ordinary enterprises

In the first phase, since November 2024, law enforcement agencies such as prosecutors, tax authorities and local governments have begun to obtain account authority to realize the liquidation of seizure of cryptocurrencies. Nonprofits and exchanges are expected to follow up in the second quarter of 2025. The second phase marks a more significant shift. Starting from the second half of 2025, listed companies and professional investment companies will be allowed to conduct cryptocurrency transactions for investment and financial management purposes.

But most Web3 projects belong to ordinary enterprises in the third stage. To obtain the second stage of qualification, enterprises must maintain a balance of at least 10 billion won (approximately US$7 million) in financial investment products under the Capital Markets Act, while the externally audited entity is 5 billion won (approximately US$3.5 million) - a threshold that most Web3 companies cannot reach. Therefore, most Web3 projects cannot immediately benefit from the new regulations. But the roadmap still indicates a gradual easing of regulatory constraints. As the third phase advances, direct market access for Web3 native enterprises will become increasingly feasible.

2.1 The positive significance of allowing corporate transaction accounts

1. Lay the legal foundation for Korean companies to carry out Web3 business

2. Enhance market stability through institutional investors with structured risk management and long-term strategies

3. Promote diversification of financial services, including cryptocurrency funds and custody services

Web3 projects often use native token exchange services and resources. But in South Korea, companies have had almost no legal way to liquidate crypto assets they have obtained. The new policy establishes a key entrance for corporate compliance operations and promotes the formal development of encryption-related business activities.

The progress is expected to be further expanded in the second half of the year, when trading authority will be extended to listed companies and registered institutional investors. Unlike retail investors, corporate investors tend to adopt structured risk management frameworks and long-term investment strategies. Their entry into the market is expected to reduce volatility and support the sustainable development of South Korea's Web3 ecosystem. Furthermore, wider business participation may improve the ongoing inefficiency problem in the local market—most notably the "Kimchi Premium".

The increase in institutional participants is also expected to broaden the scope of crypto-related financial services. Asset management companies may launch cryptocurrency funds or acquire custodians to provide comprehensive solutions. Fintech companies may develop corporate finance tools that support crypto account management. These developments will help South Korea's Web3 industry expand by strengthening supporting service infrastructure and attracting more traditional financial institutions.

2.2 Potential risks of allowing enterprises to encrypt their accounts

1. Phase-by-phase deregulation may lead to supply and demand imbalance, putting downward pressure on prices

2. Government efforts to ensure taxes are expected to strengthen as listed companies and institutional investors enter the market

3. Conservative risk management by institutional investors may lead to concentrated holdings of Bitcoin, triggering concerns about altcoin market activity decline

The introduction of corporate accounts may have a substantial impact on retail participants. From the perspective of market dynamics, phased deregulation may lead to imbalance in pressure on buyers and sellers. According to the FSC's corporate roadmap, regulators believe that the risk of corporate selling activities is relatively low. Therefore, by the end of 2025, only sellers may enter the market liquidity, resulting in downward pressure on prices. While the expected sell-off volume may remain moderate relative to the overall market, low-liquidity tokens may face greater volatility.

At the regulatory level, government efforts to ensure taxation are expected to strengthen when listed companies and institutional investors fully enter the market. Although cryptocurrency taxation has been postponed to January 1, 2027, the presidential election held on June 3, 2025 may change the direction of policy and deserves close attention.

In terms of investment behavior, corporate capital may flow centrally to Bitcoin. As shown by Strategy in the United States (formerly MicroStrategy) and Metaplanet in Japan, institutional investors allocate stable assets in the market due to conservative risk management tendencies. This could lead to a large amount of capital flowing into Bitcoin or have an impact on the altcoin market, where Korean retail investors have historically been highly active. Therefore, the altcoin market may face weakening interest and declining liquidity in the short and medium term.

3. Industrial Transformation: Strategic Layout of Global Web3 Projects

After the United States and China, South Korea has become the core strategic market for global Web3 projects. In response, many international teams have actively recruited Korean talents and established substantive cooperation, showing a strategic shift from superficial marketing to building a sustainable, builder-led local ecology. This long-term layout not only supports the growth of individual projects, but also enhances the overall competitiveness of South Korea 's Web3 industry.

3.1 Project support: Point the industry direction by supporting mature

teams

Source: Avalanche Korea X

The Avalanche and the TON Foundation are examples of global projects that build an ecosystem by directly supporting local Korean teams. After a successful collaboration with Island of Adventure, Avalanche has expanded its collaboration with small and medium-sized projects in South Korea. The team holds demonstration days every quarter to display available products and actively attract users, forming a closed loop of feedback that provides substantial value to projects and participants.

The TON Foundation has taken a more structured path by launching the "TON Society Korea Builder" plan. The plan includes formal project database, systematic support architecture and extended network access to strengthen the local TON ecosystem in a scalable way.

These ecological support strategies have produced practical results beyond short-term exposure or participation indicators. Proven local developers gain a more stable growth base, and their success stories provide clear guidance for new entrants. At the same time, these measures lay the foundation for the international expansion of South Korea 's projects.

3.2 Hackathon: Cultivating Korean builders and strengthening market

potential

The hackathons hosted by XRPL Korea (Ripple) and Superteam Korea (Solana) have gone beyond the scope of a single event and become a key turning point in the Korean Web3 ecosystem. In March, Ripple held a two-day "DE-BUTHON 2025", attracting 24 teams and 203 participants. Superteam Korea joined hands with 22 global partners to host "SEOULANA HACKATHON", with more than 300 participants.

The scale and success of these activities help reverse South Korea’s perception as a speculative-driven market. The high participation in large hackathons reflects the existence of a strong builder ecosystem. These activities have now become a strategic launch platform – providing builders with clear market access paths and bridging the gap between prototype development and actual deployment.

As of the first quarter of 2025, driven by ecological construction measures led by global networks (rather than pure capital inflows), South Korea 's Web3 industry began to show quantifiable progress. Strengthened cooperation with mature participants and cooperating with developer support programs are cultivating a new generation of local builders.

These developments mark a new stage of momentum in South Korea's Web3 field. On this basis, the Korean project is expected to output substantial innovation to the global stage in the next few years.

4. From investment-driven to industry-driven: The turning point of the

Korean Web3 market

In the first quarter of 2025, the South Korean Web3 market ushered in a key transformation - from an investment-driven environment to a mature industrial ecosystem. Regulatory progress including phased opening of corporate crypto trading accounts has laid the foundation for structured market participation. At the same time, the continued ecological construction efforts of global Web3 projects have helped the Korean market achieve long-term growth positioning.

Another important milestone is the successful completion of the first retail user real-life transaction for the Bank of Korea Digital Currency (CBDC). During the same period, major South Korean commercial banks began jointly exploring the issuance of Korean won stablecoins in early April. Bank of Korea has also shown that it will play a more active role in future regulatory legislation.

In terms of infrastructure, the ongoing discussion on the "one exchange-multi-bank" system indicates potential structural breakthroughs. Under this model, cryptocurrency exchanges will no longer be limited to a single bank partner and can connect with multiple commercial banks. This move is expected to significantly improve market flexibility and user access.

Overall, these developments clearly show the evolution of South Korea 's Web3 field to a sustainable industrial ecosystem. After years of regulatory constraints and structural inefficiency, South Korea is entering a new stage of policy coordination, institutional participation and industrial growth.