The “Kimchi premium”, a term used commonly by traders to refer to the substantial price difference between digital currencies traded on South Korean exchanges and other international trading platforms, may no longer reflect the once-booming crypto market of South Korea.

According to a recent report published by Quartz, exchanges currently operating in Korea are planning to “get the hell out.” A leading Korean exchange, Coinone, told Quartz “earlier in October” that it’s looking to shift its operations to markets abroad – ideally, somewhere in Asia by 2019.

Wonsuk Wayne Lee, Coinone’s business strategist, said during an interview in Seoul, that: 

The company’s major target market is the southeast Asian region, including Singapore and Hong Kong. Basically we are trying to … aggregate all the liquidity, and we are going to form an umbrella, which is going to be another exchange.

Wonsuk Wayne Lee

Coinone, Bithumb, Upbit Looking To Move Out 

Coinone, which is currently based in Seoul, also has offices in Indonesia and is talking to potential future partners located in two other countries. The Korean exchange’s long-term business strategy involves launching three or four more crypto-related initiatives in which it aims to hold a majority (ownership) stake.

It’s possible Coinone could move its headquarters to smaller, more crypto-friendly jurisdictions like that of Malta, which many believe is turning into a blockchain hub. Notably, Coinone is not the only Korean digital asset exchange that’s looking to move out of South Korea. In fact, Korea-based Upbit and Bithumb recently revealed they plan to conduct operations in Singapore and Thailand, respectively.

While these are planning ot move out, reportedly over a slowdown in retail cryptocurrency trading after the government issued a crackdown on ICOs and privacy coins,  Chinese exchange BTCC plans on launching in the country.

Sticter AML/KYC Requirements

Many crypto market analysts are also attributing the planned move outs of crypto exchanges to stricter regulatory oversight and measures such as anti-money laundering (AML) and know-your-customer (KYC) checks being enforced by Korean authorities.

In late 2017, when cryptocurrency prices reached their all-time highs, Korean residents were being charged over 50% more for digital currencies – compared to the average international price (at the time) according to Bloomberg.

A Korean exchange operator, who chose to remain anonymous, revealed:

The public image that the government is trying to formulate is that exchanges in Korea are thugs. I wish I could tell you, ‘In this area we are being restricted like that.’ But it’s not like that because there is no regulation.

Korean exchange operator

Other local sources reported that Korean digital currency exchanges were no longer categorized by the nation’s regulators as “venture enterprises”, meaning that they cannot claim lucrative tax benefits, or cuts, in addition to other advantages.