CryptoQuant CEO: South Korea’s financial problems may force cryptocurrency businesses to go overseas

Capital outflows could further destabilize the local financial system, making the country less attractive to international investors

20.12.2024 - 08:15

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3 min

What’s new? Ki Young Ju, the CEO and founder of CryptoQuant, has expressed concern about South Korea’s financial stability, warning that weak economic policies and political turmoil could drive cryptocurrency businesses and capital out of the country.

In a December 19 post on X, Ju criticized South Korea’s economic policies, highlighting the rising value of the Korean won and the declining attractiveness of domestic assets.

The CryptoQuant chief noted that the government’s efforts to stabilize the currency have largely failed, exacerbating economic instability. Ju added that the alignment of the value of USDT on Upbit with the International Monetary Fund (IMF) rate is a warning sign indicating a decline in confidence in the Korean economy.

Korea’s exchanges will be required to hand over crypto transaction data to tax and financial regulators

The initiative would introduce a definition of virtual assets into the Foreign Exchange Transactions Act

What else is known? This trend, coupled with the falling South Korean won (KRW), could signal capital outflows, a phenomenon where investors move their assets overseas to avoid economic losses.

The CEO expressed disappointment with the government’s approach to capital preservation, emphasizing the need for fewer restrictions and more incentives to encourage investment. He remarked:

“The government should not forcefully hold on to capital that is fleeing overseas.”

Ju also shared his growing dissatisfaction as a domestic business operator, hinting at plans to move his company overseas after seven years of operating in South Korea. This capital outflow could further destabilize the local financial system, making South Korea less attractive to international investors and affecting its global economic standing.

Recall that the South Korean Parliament is considering implementing a tax on crypto income from 2025. According to the project, the amount of the levy on income over 2,5 million won will be 20%. This may further aggravate the economic situation, causing additional difficulties for crypto companies and investors already concerned about economic instability and possible capital outflow.

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