Korea Web3 Market Q1 2025 Update, Is Korea a Liquidity Exit?
From Investment to Industry
This report was written by Tiger Research, examining Korea's Web3 market in Q1 2025, analyzing its evolution from a liquidity exit to a structured industry ecosystem, and highlighting key regulatory developments and global project initiatives.
TL;DR
From Liquidity Exit to Industry Ecosystem: In Q1 2025, Korea’s Web3 market reached a turning point. Once seen primarily as a ‘liquidity exit’ for global projects, it is now evolving into a structured and self-sustaining industry ecosystem.
Impact of Corporate Account Regulatory Easing: As a part of the Financial Services Commission’s roadmap, institutional entities are gradually being allowed to trade cryptocurrencies through corporate accounts.
Ecosystem Development Led by Global Projects: Projects such as Avalanche, TON, Ripple, and Solana are actively establishing long-term foundations in Korea. Their activities extend beyond marketing, with efforts to build developer communities and host hackathons.
1. Korean Web3 Market Beyond Q1 2025: Still Just a Liquidity Exit?
Despite active retail participation and abundant liquidity, Korea’s Web3 market has made limited progress in institutional infrastructure. Regulatory efforts have prioritized investor protection over ecosystem development, delaying broader industry growth.
The two most significant barriers were: 1) the restriction on linking corporate accounts to crypto exchanges, 2) the high entry barrier for obtaining a VASP (Virtual Asset Service Provider) license. Corporations were unable to connect their corporate accounts to local exchanges, making it legally impossible to convert cryptocurrencies acquired during business operations into fiat through Korean financial institutions. While some firms turned to overseas entities as a workaround, this approach carried regulatory risks and did not offer a sustainable long-term solution.
The high entry barrier for VASP registration also served as a major constraint on market development. While small-scale operations were technically feasible without registration, larger initiatives faced ongoing legal and regulatory uncertainty.
These institutional constraints, combined with investor activity that far outpaces the maturity of the local ecosystem, have unfortunately led some projects to view Korea primarily as a channel for investor acquisition. Within this context, it becomes difficult to refute the external characterization of the Korean market as a mere “liquidity exit.”
Market developments in the first quarter of 2025 suggest that Korea has the potential to shift from a speculation-driven market to one focused on industry revitalization. Recent regulatory improvements—such as the allowance of corporate accounts for crypto trading—signal meaningful structural change. Beneath the surface, global projects are steadily building local ecosystems, supported by a growing base of builders and emerging initiatives.
The Korean Web3 market now stands at a critical inflection point. As the ecosystem matures beyond investor-driven momentum, it is expected to generate greater long-term value, underpinned by both institutional readiness and sustained investment interest.
2. Institutional Progress: Allowing Corporate Accounts to Trade Cryptocurrencies
In South Korea, the restriction on crypto trading by legal entities began in 2017 with the "Park Sang-gi's Nan," which was led by then-Minister of Justice Park Sang-gi, and effectively banned financial firms and corporations from participating in crypto trading. However, even after the guidelines ended, the practice continued, resulting in a dual system where individuals were allowed to trade within the regulations, while legal entities were restricted in their investment and trading activities.
To address these constraints, the Financial Services Commission (FSC) officially announced the “Roadmap for Corporate Participation in the Crypto Market” on February 13, 2025. A key highlight of the roadmap is the phased removal of restrictions on corporate crypto trading, which have been in place for the past seven years.
Stage 1 (from Q2 2025): Account access for law enforcement agencies, non-profit organizations, and crypto exchanges, limited to asset liquidation purposes
Stage 2 (from H2 2025): Trading permissions for professional investors, including listed companies and registered investment firms
Stage 3 (mid- to long-term): Full market access granted to general corporations
In Stage 1, law enforcement agencies—such as prosecutors, tax authorities, and local governments—have already begun receiving account access since November 2024, enabling the liquidation of seized cryptocurrencies. Non-profit organizations and exchanges are expected to follow in Q2 2025. Stage 2 marks a more notable shift. From the second half of 2025, listed firms and professional investment corporations will be allowed to trade cryptocurrencies for investment and treasury purposes.
However, most Web3 projects are classified as general corporations under Stage 3. To qualify for Stage 2, firms must maintain a financial investment product balance of at least KRW 10 billion (approximately USD 7 million), or KRW 5 billion (approximately USD 3.5 million) for externally audited entities, as stipulated by the Capital Markets Act—a threshold that most Web3 companies do not meet. As a result, the majority of Web3 projects will not benefit immediately from the revised framework. Still, the roadmap signals a gradual easing of regulatory constraints. As Stage 3 implementation advances, direct market access for Web3-native companies is expected to become increasingly feasible.
2.1. Positive Implications of Permitting Corporate Trading Accounts
1. Establishes a legal foundation for Korean corporations to operate Web3 businesses
2. Enhances market stability through institutional investors with structured risk management and long-term strategies
3. Drives diversification of financial services, including crypto-focused funds and custody offeringsWeb3 projects often exchange services and resources using their native tokens. However, in Korea, corporations have had virtually no legal pathway to liquidate acquired crypto assets. The recent policy shift establishes a critical entry point for businesses to operate within a compliant framework, enabling the formalization and growth of crypto-related business activities.
This development is expected to expand further in the second half of the year, when trading permissions will extend to listed companies and registered institutional investors. Unlike retail participants, corporate investors tend to adopt structured risk management frameworks and longer-term investment strategies. Their entry into the market is expected to reduce volatility and support the sustainable growth of Korea’s Web3 ecosystem. In addition, broader corporate participation may help address persistent inefficiencies in the local market—most notably, the “Kimchi Premium.”
The growing presence of institutional participants is also expected to broaden the scope of crypto-related financial services. Asset management firms may launch crypto-focused funds or acquire custody service providers to offer integrated solutions. Financial technology companies are also likely to develop corporate treasury tools that support crypto account management. Together, these developments will help expand Korea’s Web3 industry by strengthening its supporting service infrastructure and attracting more traditional financial institutions into the space.
2.2. Potential Risks of Permitting Corporate Crypto Accounts
1. A supply-demand imbalance may emerge during the phased deregulation process, potentially exerting downward pressure on prices
2. Government efforts to secure tax revenue are expected to intensify as listed companies and institutional investors enter the market
3. Conservative risk management by institutional investors may lead to a concentration in Bitcoin, raising concerns over reduced activity in the altcoin marketThe introduction of corporate accounts is likely to have material implications for retail participants. From a market dynamics perspective, the phased approach to deregulation may lead to an imbalance between sell-side and buy-side pressures. According to the FSC’s corporate roadmap, regulators view corporate selling activity as relatively low-risk. As a result, only sell-side liquidity may enter the market through the end of 2025, potentially driving price declines. While the expected selling volume may remain modest relative to the overall market, illiquid tokens could face heightened volatility.
On the regulatory front, government efforts to secure tax revenue are expected to intensify once listed companies and institutional investors gain full access to the market. Although crypto taxation has been postponed until January 1, 2027, a snap presidential election scheduled for June 3, 2025, may alter the policy landscape, warranting close monitoring.
In terms of investment behavior, corporate capital is expected to concentrate in Bitcoin. As seen with Strategy (formerly MicroStrategy) in the U.S. and Metaplanet in Japan, institutional investors tend to allocate funds to large-cap, stable assets due to conservative risk management practices. This may lead to substantial capital inflows into Bitcoin, potentially at the expense of the altcoin market—where Korean retail investors have historically been highly active. As a result, the altcoin market may experience dampened interest and declining liquidity in the short to medium term.
3. Industry Shift: Strategic Moves by Global Web3 Projects
Following the U.S. and China, Korea has solidified its position as a core strategic market for global Web3 projects. In response, many international teams have actively recruited Korean talent and established practical partnerships, signaling a shift beyond surface-level marketing toward building durable, builder-led local ecosystems. This long-standing approach has supported the growth of individual projects and is now contributing to the broader competitiveness of Korea’s Web3 industry.
3.1. Project Support: Signaling Industry Direction Through Backing of Proven Teams
Avalanche and the TON Foundation are notable examples of global projects focused on ecosystem building through direct support of local teams in Korea. Following its successful partnership with MapleStory, Avalanche has expanded its collaboration with small and mid-sized domestic projects. The team hosts quarterly demo days to showcase working products and actively engage users, fostering a feedback loop that delivers tangible value to both projects and participants.
The TON Foundation has taken a more structured approach by launching the “TON Society Korea Builder” program. This initiative includes a formal project database, systemized support structures, and expanded network access, helping strengthen the local TON ecosystem in a scalable way.
These ecosystem support strategies have produced outcomes beyond short-term exposure or engagement metrics. Verified local developers have secured a more stable foundation for growth, and their success stories offer clear guidance to new entrants. At the same time, these initiatives have laid the groundwork for Korean projects to scale internationally.
3.2. Hackathons: Nurturing Korean Builders and Reinforcing Market Potential
Hackathons hosted by XRPL Korea(Ripple) and Superteam Korea(Solana) have emerged as more than one-off events—they now serve as critical inflection points for Korea’s Web3 ecosystem. In March, Ripple held the two-day “DE-BUTHON 2025,” attracting 24 teams and 203 participants. Similarly, Superteam Korea organized the “SEOULANA HACKATHON” with 22 global partners, drawing over 300 participants.
The scale and success of these events help dispel the perception of Korea as a market driven primarily by speculative activity. High participation in large-scale hackathons reflects the presence of a robust, capable builder ecosystem. More than simple competitions, these events now serve as strategic launchpads—offering builders a clear pathway to market entry and bridging the gap between prototype development and real-world deployment.
As of Q1 2025, Korea’s Web3 industry is beginning to show measurable progress, driven not solely by capital inflows but by ecosystem-building initiatives led by global networks. Strengthened collaboration with established players, combined with developer support programs, is helping to cultivate a new generation of local builders.
These developments signal a renewed phase of momentum for Korea’s Web3 sector. With this foundation, Korean projects are well-positioned to deliver meaningful innovation on the global stage in the years ahead.
4. From Investment-Driven to Industry-Driven: A Turning Point in Korea’s Web3 Market
In Q1 2025, Korea’s Web3 market reached a pivotal transition—from a primarily investment-driven environment to a maturing industrial ecosystem. Regulatory progress, including the phased introduction of corporate crypto trading accounts, has laid the groundwork for more structured market participation. At the same time, sustained ecosystem-building efforts by global Web3 projects have helped position the Korean market for long-term growth.
Another notable milestone was the successful pilot of Korea’s central bank digital currency (CBDC), Project Han-gang, which marked its first real-world transaction with retail users. In parallel, major domestic banks began jointly exploring the issuance of a KRW-based stablecoin in early April. The Bank of Korea has also signaled its intent to take a more active role in forthcoming regulatory legislation.
On the infrastructure side, ongoing discussions around a “one exchange–multi-bank” system represent a potential structural breakthrough. Under this model, crypto exchanges would no longer be restricted to a single banking partner and could instead engage with multiple commercial banks. This approach is expected to significantly enhance both market flexibility and user access.
Taken together, these developments point to a clear evolution of Korea’s Web3 sector into a sustainable industrial ecosystem. After years of regulatory constraints and structural inefficiencies, Korea is now entering a new phase—defined by policy alignment, institutional participation, and early signs of industrial-scale growth.
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