South Korea's crypto market experienced a significant turnaround in the first half of 2026, with AI tokens becoming the dominant theme in won trading by June, according to Chainalysis data. AI tokens' share of won trading was 19.5 times their share of yen trading, dwarfing their performance in euro, British pound, and Brazilian real trading. As per Chainalysis, AI cryptocurrencies were the single most popular thematically-defined investment category, beating out payment tokens like XRP. This shift has helped South Korea's crypto economy grow 12.3% to $449.1 billion, even as East Asia's market contracted modestly, with retail traders driving nearly all of that growth while Korean banks and institutions remain largely in pilot mode.
South Korea's crypto market experienced a significant decline in the first half of 2026, with market capitalization falling 33% to ₹58.9 trillion, according to the Korea Financial Intelligence Unit (KoFIU) and Financial Supervisory Service survey released on October 1. The market posted a maximum drawdown of 69%, which exceeded both the KOSPI's 55.1% and KOSDAQ's 31.8% performance over the same period. This represents a continuation of the decline recorded in late 2025, when market capitalization slipped 8% and operating profits fell 38%, though deposits had risen 31% during that period. The survey covered 26 registered virtual asset service providers from January 1 through June 30, including 17 exchanges and nine custody and wallet businesses.
Trading activity fell significantly more than market valuations, with average daily crypto trading volume dropping 44% to ₹3.1 trillion from ₹5.4 trillion in the second half of 2025. Exchange sales also fell 41% during the same comparison period, as reported by KoFIU. Despite the overall decline, KoFIU counted 11.175 million tradable accounts at the end of June, representing a 0.4% increase from 11.126 million six months earlier. The most common user age group changed from people in their 30s to those in their 40s, while accounts holding less than ₹1 million in virtual assets increased by 370,000 to 8.63 million, indicating more registered accounts at the same time that trading and deposits were declining.
Worldcoin (WLD) emerged as the top AI token performer, drawing $7.41 billion in Korean won trading volume over the year, more than double the $3.2 billion contributed by newcomer Sahara AI (SAHARA). Other notable performers included Virtuals Protocol (VIRTUAL) with $2.7 billion, Bio Protocol (BIO) at $2 billion, and NEAR Protocol (NEAR) with $1.7 billion. According to Grayscale data, AI crypto assets rose 54% in September compared to 24% for the wider market, with WLD remaining among the sector's leaders. Over the past month, WLD climbed 44.28% to $0.57155, though it slipped 1.74% in the past day and still trades about 95% below its $11.74 record from March 2024. The supply side has also eased, with World announcing in April that daily WLD unlocks would fall 43% from July 24 to about 2.9 million tokens.
Won deposits held by crypto exchanges fell 35% to ₹5.2 trillion from ₹8.1 trillion, while the value of crypto held through Korean exchanges dropped 33% to ₹58.9 trillion from ₹87.2 trillion at the end of 2025. The number of unique crypto assets in circulation fell 5% to 673 while single-exchange listings declined to 234 from 296. The regulator separately flagged risks in smaller listings, with 93 single-exchange listings (40%) each having market values of ₹100 million or less, leaving them exposed to low liquidity and sharp price moves. KoFIU warned that such tokens carry liquidity risk and extreme price volatility.
South Korea's crypto market remains heavily concentrated on platforms offering Korean won trading. Won-based exchanges held ₹58.5 trillion of the country's ₹58.9 trillion domestic crypto value at the end of June, while coin-only exchanges accounted for only ₹330 billion, equal to roughly 0.6% of the total. Trading turnover showed significant differences, with won-market exchanges generating around ₹3.1 trillion in average daily volume compared to just ₹380 million for coin-only venues. The maximum drawdown eased from 73% in the second half of 2025, pointing to slightly narrower price swings, though the drawdown still exceeded both stock indices.
