[Exclusive] Cryptocurrency Trading Volume Hits 1,500 Trillion in Three Months... Already Four Times Last Year's Amount

Chaos in Cryptocurrency <Part 1>

Monthly Trading Volume Hits Record High
Daily Trading Amount Surpasses 24 Trillion
Signs of Market Overheating... Focus Only on Crackdown of Illegal Activities

[Asia Economy Reporters Eunbyeol Kim and Sehee Jang] It has been revealed that the amount of money invested in virtual assets (cryptocurrencies) over the past three months this year exceeds four times the total transaction amount of last year. Recently, investors' interest has notably shifted from the stock market to virtual assets such as Bitcoin and altcoins, with nearly 1,500 trillion KRW invested in the first quarter alone. Although the government belatedly took action as the cryptocurrency market showed signs of overheating, its focus has been skewed toward cracking down on illegal activities such as poor management of trading operators, illegal foreign currency remittances, and investment fraud. Critics point out that diagnosing the investment frenzy is limited since the government has yet to define cryptocurrencies.

According to data on transaction amounts from the four major domestic cryptocurrency exchanges (Bithumb, Upbit, Korbit, Coinone) received by the office of Seong Il-jong, a member of the National Assembly's Political Affairs Committee from the People Power Party, from the Financial Services Commission on the 19th, the cryptocurrency transaction amount from January to March this year reached 1,486.277 trillion KRW. This is 4.16 times the total annual investment amount of 357.3449 trillion KRW recorded last year.

The monthly transaction amounts are also hitting record highs. In January this year, the amount was 292.1236 trillion KRW, in February 463.1547 trillion KRW, and in March 730.9987 trillion KRW, showing a surge in transaction volume. According to the cryptocurrency information site CoinMarketCap, on the afternoon of the 15th, the daily transaction amount across 14 exchanges supporting KRW trading surpassed 24 trillion KRW. Considering this, the transaction amount for this month is expected to exceed that of last month.

Cryptocurrency transaction amounts began to increase significantly from November last year. The transaction amounts for November and December last year were 45.8826 trillion KRW and 94.0943 trillion KRW, respectively. The number of transactions also rose sharply. The number of times cryptocurrencies were bought or sold from January to March was 1.88689 billion, which is 200 million more than the annual total of 1.56263 billion last year. This is the result of people rushing to invest in asset markets, hoping to make money after the recent slowdown in the stock market's upward trend.

However, government policy is focused solely on eradicating illegal activities. The government announced plans to conduct a ‘focused crackdown on illegal activities related to virtual assets’ such as multi-level marketing, money laundering, and investment fraud, and to further monitor market trends.

Despite government measures, experts argue that since the average daily transaction amount has grown larger than that of the stock market and considering the worst-case scenario could lead to financial market instability, methods for monitoring must be found. Domestically, ‘cryptocurrency operators’ are subject to anti-money laundering obligations, but cryptocurrencies are not recognized as financial products or currency, placing them outside the regulatory framework.

Assemblyman Seong said, "Although cryptocurrencies are currently not recognized as legal tender or financial investment products, given the significant increase in transactions, the government needs to conduct a thorough review of their impact on our economy."