Ki Young Ju, the CEO and founder of CryptoQuant, has raised concerns about South Korea’s financial stability, warning that poor economic policies and political unrest could drive crypto 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 diminishing appeal of domestic assets.
CryptoQuant CEO @ki_young_ju warns of economic instability in South Korea, calls for financial policy reforms. pic.twitter.com/Ma88zAE4Sv
— Coinwaft (@coinwaft) December 19, 2024
Ju stated, “Domestic assets, including the Korean won, are not attractive at all.”
South Korea’s Economic Instability, Capital Flight, and the Crypto Sector’s Concerns
The CryptoQuant boss pointed out that government efforts to stabilize the currency have largely failed, exacerbating economic instability.
Ju noted that aligning the USDT value on Upbit with the International Monetary Fund (IMF) rate is a warning sign, indicating diminished confidence in the Korean economy.
This trend, coupled with the declining South Korean won (KRW), could signal capital flight, a phenomenon where investors move their assets abroad to avoid economic losses.
The CEO expressed frustration with the government’s approach to retaining capital, emphasizing the need for fewer restrictions and more incentives to encourage investments.
“The government should not forcefully hold on to capital that is fleeing overseas,” he remarked.
Ju also shared his growing dissatisfaction as a domestic business operator, hinting at plans to relocate his company after seven years in South Korea.
Just called my counter part in Korea, he says that the reports are FUD. The position is that the Korean authorities are clamping down on unregulated exchanges and exchanges that are not compliant. Further they are auditing the quality of the KYC. A banis not on the cards.
— Ran Neuner (@cryptomanran) January 11, 2018
This capital flight could further destabilize the local financial system, making South Korea less appealing to international investors and impacting its global economic standing.
Market Impact of South Korea’s Political Unrest Amid Regulatory Challenges and Taxation
South Korea’s political turbulence has compounded its financial woes.
The December 2024 impeachment of President Yoon Suk-yeol after a martial law declaration created volatility in the stock market.
South Korea President Yoon just
declared martial law in country.
People are thinking North Korea have
something to do with it and Koreans
are in panic mode.
On UPBIT a biggest Korean exchange
Bitcoin dumped -27% within minutes
from $95,800 to $71,800. pic.twitter.com/Mu9OiK804m— Ash Crypto (@Ashcryptoreal) December 3, 2024
The nation’s benchmark stock market index, the KOSPI index, fell by 8.76% Year-to-Date(YTD) and continues to exhibit bearish momentum, trading at 2,435.93 as of December 19.
The National Assembly’s decision to pause all crypto-related legislation has added to market uncertainty.
Meanwhile, Deputy Prime Minister Choi Sang-mok’s reassurances about stabilizing the economy have done little to address investor concerns.
Similarly, South Korea’s restrictive stance on cryptocurrency has long been a point of contention.
Plans to implement a 20% tax on crypto gains from January 2025, which have been delayed multiple times due to opposition, continue to face resistance.
Recent amendments propose raising the exemption threshold to annual gains of 50 million won ($35,919), but these measures may not be enough to retain investor confidence.
Adding to the scrutiny, former Democratic Party congressman Kim Nam-guk faces legal charges for concealing significant crypto holdings, underscoring the nation’s rigid approach to crypto governance.
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