South Korea Hits Record $34 Billion in Crypto Trade Volume Amid Martial Law Declaration

Upbit Leads Surge as Political Crisis Triggers Massive Trading Spree in South Korea

In an unprecedented turn of events, South Korea’s cryptocurrency market saw a historic surge, with a record $34.2 billion in trade volume processed within a 24-hour period. The spike came as a result of a brief declaration of emergency martial law by President Yoon Suk-yeol, which sparked panic among local traders and led to massive sell-offs on major exchanges.

This monumental trading activity unfolded across the country’s leading cryptocurrency exchanges, including Upbit, Bithumb, Coinone, Korbit, and Gopax. However, it was Upbit that dominated the surge, processing a staggering $27.25 billion alone, according to CoinMarketCap data. This boost in trade volume nearly doubled the $18 billion recorded just a day earlier, which had already been noteworthy for surpassing the daily turnover of the local stock market.

Political Turmoil Fuels Panic Selling

The unprecedented trading activity occurred on the heels of a political crisis in South Korea. Late Tuesday evening, President Yoon declared martial law in response to what he described as threats to democracy posed by “anti-state” forces allegedly connected to the opposition’s left-wing party. The emergency measures were in place for only six hours, but their impact was felt far and wide.

During this period, panic spread among crypto traders. Bitcoin’s price on Upbit plummeted to 88 million won ($62,182) at one point, while other cryptocurrencies also saw significant price declines. The surge in activity, coupled with the chaos surrounding the emergency measures, led to widespread service outages on local exchanges as their systems struggled to keep up with the volume.

By the early hours of Wednesday morning, lawmakers were in an emergency session, where they unanimously voted to overturn the martial law decree. President Yoon, following the vote, rescinded his directive, but the political storm was far from over.

Political Fallout and Crypto Speculation

Despite the quick reversal of martial law, the political fallout continues to stir unrest in South Korea. The opposition party has vowed to file treason charges against President Yoon and the Ministers of Defense and Interior, with plans for their impeachment. Meanwhile, political speculation has surged on decentralized platforms, with bets placed on Yoon’s potential early departure from office.

Interestingly, the speculative nature of crypto markets in South Korea isn’t limited to just the assets themselves. A prediction market on Polymarket saw the odds of a $500,000 bet on Yoon’s early exit from office spike to 78%, before settling back to 47%. If he does remain in office, his term is set to end in May 2027.

Crypto Trust and South Korea’s Youth

Beyond the immediate effects of the martial law crisis, South Korea’s younger generation is increasingly turning to cryptocurrencies as a trusted alternative to traditional financial systems. A recent survey revealed that many young South Koreans have lost faith in the national pension system, with over 75% of those aged 20-39 expressing distrust in state-issued pensions. Over half of these respondents reported that they are actively building their own retirement funds, primarily through stocks and cryptocurrencies.

The growing interest in crypto among South Koreans extends to election candidates as well. A report from Yonhap revealed that about 7% of political candidates have some exposure to digital assets, with crypto ownership becoming a notable part of their financial portfolios.

Regulatory Landscape and Tax Delays

As South Korea’s crypto market continues to grow, the government is grappling with regulatory challenges. Recently, the country’s lawmakers introduced stricter regulations for token listings on exchanges, including measures to block tokens that have been compromised in hacks. These regulations aim to ensure greater safety and transparency in the rapidly expanding market.

In another key development, South Korea has once again delayed the implementation of its 20% tax on cryptocurrency gains. This delay, the third since the tax was first proposed in 2021, pushes the tax implementation to 2025. The decision was made after an agreement between the ruling People Power Party (PPP) and the Democratic Party of Korea (DPK) during budget negotiations.