South Koreans moved more than 160 trillion won ($110 billion) from local crypto exchanges to foreign platforms last year due regulatory restrictions in the country, one of Asia’s most active digital asset markets, a joint Coingecko and Tiger Research report revealed Friday.

The regulatory framework has been slow to evolve. In December, the long-awaited Digital Asset Basic Act (DABA), a sweeping framework meant to govern crypto trading and issuance, was delayed because of disagreements among regulators over stablecoin issuance. The Virtual Asset User Protection Act, which came into force in 2024, does not address market structure issues such as leverage or derivatives trading.

The regulatory gap raised concerns among market participants that Korea’s centralized crypto exchanges (CEXs) are increasingly unable to compete with offshore platforms offering more complex trading products.

“The number of South Korean investors holding large sums in overseas cryptocurrency exchange accounts has more than doubled in a year, reflecting both the global market’s resurgence and growing frustration with South Korea’s restrictive trading environment,” Korean news agency Aju Press reported in November.

The research found that cryptocurrency has become a primary investment asset in South Korea, with investor numbers rising to 10 million and exchanges such as Upbit and Bithumb generating revenues in the trillions of won.

Growth, however, is stagnating, even as Korean investors continue to trade crypto actively and increasingly turn to foreign-based platforms such as Binance and Bybit, according to the report.

The report said the main reason Korean investors are moving funds offshore is the gap in investment opportunities, as South Korea prohibits domestic exchanges from offering crypto derivatives to retail traders.

“Domestic CEXs face strict regulations that limit them to spot trading, while foreign CEXs fill this gap with more complex products, including leveraged derivatives,” it said.