South Korea’s five major cryptocurrency exchanges recorded a net outflow of 560.3 billion won in stablecoins during June, marking the 18th consecutive month of such outflows, according to data from the Financial Supervisory Service (FSS) obtained by Yonhap News Agency. The exchanges transferred 2.7 trillion won in stablecoins offshore in the month, with 2.2 trillion won received from foreign platforms, reflecting ongoing cross-border activity in the sector.
Market participants cited growing demand for restricted products such as derivatives and tokenized assets as a key driver of the outflows. The figures highlight persistent challenges in regulating stablecoin movements, despite recent efforts to tighten oversight.
People Power Party lawmaker Lee Jong-wook, who secured the FSS data through a legislative inquiry, called for a reassessment of regulatory frameworks to address gaps in investor protection. “The government must comprehensively examine its investor protection and supervisory frameworks again and move swiftly to improve regulations,” he said, according to The Korea Times.
The Financial Intelligence Unit (FIU) has proposed extending mandatory Travel Rule reporting requirements to cover transactions below 1 million won, aiming to curb potential regulatory arbitrage. However, disagreements among lawmakers over which institutions should be permitted to issue won-pegged stablecoins have delayed progress on the Digital Asset Basic Act.
FIU officials have expressed concerns about uneven licensing and supervision across jurisdictions, which they say creates opportunities for illicit activity. These unresolved issues underscore the complexity of aligning domestic regulations with global standards in the fast-evolving crypto sector.
Written by Steven Cook
Regulation Desk
