South Korean retail crypto investors exit the market; banks spend ₩1 trillion in 10 days to seize control of crypto infrastructure
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South Korean retail crypto investors exit the market; banks spend ₩1 trillion in 10 days to seize control of crypto infrastructure
A Single Chart to Understand South Korea’s Institutional Crypto Landscape in 2026
Navigating Web3 tides with focused insightsAuthor: Tiger Research
Translation & Compilation: TechFlow
TechFlow Editorial: Korea’s crypto market is undergoing a power shift. The era of retail dominance is ending. Even before regulation is fully clarified, traditional financial institutions have aggressively moved to seize control over critical infrastructure—including STO standard-setting, stablecoin payment rails, and custody markets. Behind this seemingly quiet MOU (Memorandum of Understanding) race lies a battle for front-end control of digital asset finance in the coming decade—whoever controls these infrastructures will control the customer on-ramp for the next ten years.
Partnerships and equity acquisitions between Korean institutions and securities firms are accelerating in parallel across the crypto market—but the overall landscape remains difficult to grasp at a glance. While many partnerships have been announced, actual commercial deployments remain rare. This report explores why conversion rates remain so low—and why institutions continue pushing forward regardless.
Key Takeaways
Korean institutional crypto activity has moved beyond the MOU stage into concrete business operations and exchange equity acquisitions.
Institutions are quietly intensifying competition to capture key financial infrastructure—including STO standard-setting, stablecoin payment rails, and custody markets.
Domestic infrastructure builders are emerging as core pillars for institutional business, constructing Korea-specific rails aligned with the Bank of Korea’s CBDC framework and local regulatory requirements—reducing reliance on foreign technology.
The strategy of overseas Web3 foundations entering Korea has shifted entirely—from retail community-building to partnering with large enterprises and financial institutions—as traditional finance accelerates its takeover of the market.
1. The MOU Arms Race
The above diagram, compiled by Tiger Research, maps connection relationships within Korea’s institutional crypto landscape. Yet this structure is not easily decipherable at first glance. It is difficult to distinguish which lines represent active business operations versus mere MOUs—and boundaries between central hubs and peripheral participants remain blurred.
Notably, this complexity itself accurately reflects the current state of Korea’s institutional crypto market. As confirmed by Tiger Research’s dataset—150 institutions and 196 partnerships—not a single hub has yet achieved dominant market control.
Domestic institutions are establishing positions across the entire market even before full regulatory clarity emerges. Competition is currently unfolding along three fronts: stablecoins, STOs (Security Token Offerings), and custody (cryptocurrency storage).
Equally notable is financial institutions’ ongoing acquisition of exchange equity—an action widely interpreted as confidence-driven positioning ahead of final regulatory clarity.
2. The Exchange Equity Battle
Less than ten days after Hana Bank announced its acquisition of a 6.55% stake in Dunamu—the operator of Upbit—for approximately KRW 1 trillion (~USD 720 million)—Hanwha Investment & Securities approved an additional 3.90% acquisition. On May 28 of the same month, Samsung Securities, Samsung SDS, and Samsung Card jointly announced their acquisition of a 4.0% stake. Mirae Asset Securities had already signed an agreement back in February to acquire 92.06% of Korbit. Reports also indicate that Korea Investment & Securities and global exchange OKX are discussing a joint acquisition of Coinone.
This competition reflects a fundamental revaluation of crypto exchanges—not merely as trading-fee platforms, but as critical customer touchpoints capable of distributing stablecoins, offering custody services, issuing security tokens, and launching RWA (Real World Asset) products.
Banks and securities firms gain indirect access to licenses such as VASP (Virtual Asset Service Provider) registration while simultaneously securing exchanges’ user bases and liquidity. Ultimately, today’s equity battle is a contest over who will control the front end of digital asset finance.
3. Korea’s Crypto Market by Sector
A sector-by-sector analysis of the relationship map reveals an uneven landscape. Custody operations are most active, with many participants already running live services following clearance of regulatory hurdles. In contrast, RWAs and STOs largely remain at the contract or MOU stage, awaiting relevant legislation to take effect. Stablecoins face similar stagnation—no clear standard-setter has yet emerged in a position to dominate the market.
Given the differing natures of barriers across sectors, breakthrough strategies also differ. Some participants are consolidating domestic alliances while waiting for regulatory openings. Others are turning to overseas markets where regulation advances faster, carving out alternative pathways. The sections below examine specific barriers and participant strategies per sector.
3.1. RWA/STO: Legislation Passed, Commercial Infrastructure Is the Bottleneck
The domestic STO market is divided into two camps: the KOSCOM-led consortium and the fragmented investment alliance led by Shinhan Investment & Securities. Mirae Asset Securities has taken an independent path—leveraging overseas operations rather than waiting for domestic infrastructure.
KOSCOM—a core financial network operator in which Korea Exchange holds a 76.6% stake—is pursuing a neutral infrastructure model aligned with its founding mission, providing shared infrastructure for securities firms. Rather than signing exclusive agreements with individual issuers, it has integrated 11 securities firms onto its platform—aiming to establish technical standards for issuance and distribution, and ensuring compatibility with interfaces required under Korea’s integrated securities depository and custody management regulations.
Shinhan Investment & Securities rapidly built its own STO ecosystem. Starting with a proof-of-concept with Lambda 256 in 2022, it launched the joint platform PULSE in 2024 and officially rolled out multi-platform account integration services in 2025. In 2025 alone, it served as account manager for ten investment contract securities issuances and acquired controlling stakes in OTC exchange NXT—establishing an end-to-end pipeline from issuance to distribution within its own ecosystem.
Mirae Asset Securities completely bypassed domestic infrastructure development and went straight overseas. It issued digital bonds in Hong Kong, obtained a digital asset retail license from the Hong Kong Securities and Futures Commission (SFC), and plans to launch its MTS platform for retail investors in June. In the U.S., it is the only Korean securities firm to join DTCC’s tokenization working group—which includes JPMorgan, Goldman Sachs, and BlackRock—participating directly in global standard-setting discussions. When domestic STO infrastructure finally aligns with global standards, this strategy positions Mirae Asset advantageously in both regulatory alignment and negotiation leverage.
3.2. Stablecoins: Regulation, Not Technology, Is the Bottleneck
Stablecoin market participants are more diverse than in other sectors. Card companies, exchanges, fintech firms, and infrastructure providers are all entering via different routes—leveraging their respective strengths.
The largest bloc is the Kakao Group. Kakao, KakaoBank, and KakaoPay formed a joint task force to build a “super wallet” covering stablecoins, cryptocurrencies, and fiat currency. Their key asset is infrastructure accumulated since the Ground X era through operating the Kaia public blockchain. Kaia has already deployed Tether (USDT) on its network and is conducting real-time payment tests.
Shinhan Card focuses on migrating its existing payment network onto blockchain rails. In April, Shinhan Card signed an MOU with Solana—though technical groundwork predates the agreement. The company has already completed preliminary proofs-of-concept with Solana, Visa, Mastercard, and Fireblocks, and is now conducting advanced testing across six domains—including wallets and smart contracts.
The exchange bloc is circumventing delays in won-denominated stablecoins by prioritizing USD stablecoins. Dunamu is developing a won stablecoin business on its proprietary GIWA blockchain in partnership with Naver Financial. Bithumb, facing regulatory delays on won stablecoins, opted instead to secure a USD stablecoin distribution network first—partnering with Circle and WLF. A joint won stablecoin initiative with Toss is also under discussion—albeit progressing slowly.
All blocs are highly active—but all face the same regulatory barrier. The Bank of Korea is pushing a “51% rule,” permitting only banking-majority consortia to issue stablecoins, while fintech firms are lobbying for access—delaying government–ruling party consultations. Once issuance guidelines are released, the bloc with the most comprehensive public touchpoints is expected to achieve market leadership.
3.3. Custody: More Institutional Capital Required
The custody market is structurally simpler than other sectors. Four major custody providers have each secured domestic and international financial and technological partners to solidify their market positions.
KODA was co-founded by KB Kookmin Bank, Hashed, and Haechi Labs—combining traditional financial capital with crypto-native VC. Hanwha Investment & Securities, IBK Capital, and Kyobo Securities subsequently joined as investors, further bolstered by a dedicated custody insurance agreement with Samsung Fire & Marine Insurance.
KDAC is a custody provider dominated by traditional finance, with Shinhan Bank and NH Nonghyup Bank as principal shareholders. NH Nonghyup Bank was originally an investor in another custody provider, Kardo, and became a KDAC shareholder following the merger. Post-merger, KDAC’s shareholder base includes two of Korea’s top five banks.
BDACS adopted a unique approach centered on technology and partner development. By expanding custody and payment infrastructure through partnerships with Woori Bank and international digital asset infrastructure firms—including Galaxy and GK8—it also signed an MOU with Circle to issue the won stablecoin KRW1 on Circle’s Arc blockchain. BDACS is the sole VASP and key custody partner in the KRX-led KDX consortium. BDACS is currently conducting a proof-of-concept for KRW1—positioning itself as a custody provider targeting both custody and payment infrastructure.
BitGo Korea entered the domestic market leveraging its global parent company’s technical strength. BitGo’s headquarters custodies over USD 70 billion in assets and processes approximately 20% of global Bitcoin on-chain transactions. Domestically, it holds equity stakes from both Hana Financial Group and SK Telecom—making it a custody provider backed by both financial and telecom capital.
Each institution entered the market through its respective custody relationships. However, reports indicate that all major custody providers posted net losses last year—suggesting their infrastructure development has outpaced the institutional capital inflows needed to sustain operations.
Collectively, infrastructure development for STOs, stablecoins, and custody reveals a clear common constraint: domestic institutions have built business frameworks—but underlying technical infrastructure remains heavily reliant on overseas solutions.
4. Infrastructure Builders
Dependence on overseas solutions incurs structural costs: as the market grows, a substantial portion of revenue flows overseas as technology licensing fees. If overseas partners change policy or raise pricing, domestic infrastructure also faces disruption risk.
A more fundamental issue is that domains requiring alignment with Korea’s specific regulatory environment—including won stablecoin issuance, STO distribution rules, and domestic corporate account integration—cannot simply adopt global solutions off-the-shelf. This is precisely why, once relevant legislation is finalized and capital begins flowing seriously, domestic tech firms capable of designing and controlling underlying rails directly aligned with Korea’s regulatory framework will be indispensable.
Domestic companies that have identified this technology gap—and are actively building Korea-specific financial infrastructure—are already moving. Leading technology providers include:
4.1. LG CNS
Among traditional IT service providers, LG CNS maintains the clearest strategic stance. Since launching its proprietary blockchain platform “Monachain” in 2018, it has accumulated operational experience delivering services to over 220 local governments via the Korea Minting and Security Printing Corporation’s local currency platform.
This permissioned-chain experience translated into orders for CBDC and STO projects. As the lead contractor for the Bank of Korea’s CBDC project “Hangang,” LG CNS is developing a government subsidy disbursement system using deposit tokens. Through this process, it has built system architecture capabilities to run both institutional CBDCs and private digital currencies on a single network—effectively transplanting traditional finance’s security standards and procedures onto blockchain.
Developing the KOSCOM consortium’s joint STO issuance platform and Mirae Asset Securities’ STO platform follows the same logic. LG CNS does not directly issue assets—but targets three directions: building issuance and distribution platforms for banks; providing SaaS to payment operators—including credit card companies, payment gateways, and simple payment services; and developing digital asset payment platforms for securities firms. Once the regulatory framework is finalized, LG CNS appears best positioned to win infrastructure contracting opportunities.
Among blockchain infrastructure firms, DSRV stands out for directly enabling financial institutions’ entry into on-chain infrastructure. As a validator and infrastructure provider operating across more than 70 blockchain networks, DSRV manages over KRW 4 trillion (~USD 2.9 billion) in assets—ranking first in Korean Ethereum staking and top ten globally.
A key development is its expansion from node operation to full-stack institutional on-chain infrastructure. Through the DSRV Portal, financial institutions can access wallets, payments, tokenization, custody, and staking functions via APIs and dashboard interfaces. Without building their own nodes or security infrastructure, financial firms can integrate user wallets, institutional wallets, recurring payments, token issuance, burning, transfers, locking, custody, and staking capabilities.
Trust mechanisms are already in place. DSRV was among the first to obtain VASP, ISMS, and SOC 1 Type 1 certifications—directly meeting financial institutions’ regulatory, security, and operational control requirements. In practice, this means external infrastructure providers absorb the wallet security, internal controls, and operational risks that financial institutions find most burdensome when deploying on-chain services.
Its partnership strategy targets payment rail construction. DSRV co-developed remittance infrastructure compliant with Korean and Japanese regulation with SBI Ripple Asia. It partnered with Circle to develop an institutional USDC issuance, redemption, and settlement framework bypassing exchanges. It signed a stablecoin payment infrastructure agreement with BC Card to connect traditional card payment networks to blockchain.
DSRV recently completed a USD 21.7 million Series B funding round to accelerate technology development.
4.3. Altus (formerly B-Harvest)
Altus (formerly B-Harvest) operates at the integration layer between financial institutions’ legacy systems and blockchain environments. Founded in 2018, the company contributed to EVM chain development based on the Cosmos SDK and comprises over 40 engineers and researchers who have directly built multiple production networks—including Canto, Crescent, Stable, and Ault.
Altus handles protocol engineering and core architecture for Ault Blockchain—a Layer 1 focused on RWAs, trading, and payments. In 2025, it contributed EVM integration, performance enhancements, and security audits to Babylon—the Bitcoin staking L1—to support its production readiness.
Its financial institution solutions originate from the same layer. Altus builds from scratch to meet financial industry requirements: an on-chain/off-chain orchestration layer connecting legacy systems and blockchain execution environments; RWA tokenization; permissioned exchanges; stablecoin payments and settlements; and institutional wallet and custody infrastructure.
Current internal R&D runs in parallel: Canton Network architecture supporting selective inter-institutional data disclosure, and Commonware Stack—a modular blockchain framework targeting 1 million TPS.
The three companies start from different positions and possess distinct advantages. LG CNS leads with financial IT credibility, DSRV leads with blockchain validator infrastructure, and Altus leads with protocol-level customization capability. Yet all share the same objective: securing core operating systems before institutional capital flows at scale. The decisive factor will be how much trusted implementation experience each accumulates before the market fully opens.
5. Retail Exit, Institutional Entry
The recent surge in partnership announcements should not be interpreted as ordinary business expansion. These are positioning moves—where institutions seize advantageous arrangements before regulation is finalized, then leverage those arrangements to influence the final shape of the regulatory framework. Today’s partnership race is less about market capture and more about regulatory design.
Korea’s crypto market has undergone major restructuring in just six months. Custody blocs have formed, STO alliances have crystallized, and major financial holding companies have moved to acquire exchange equity. Meanwhile, retail trading volume has plummeted. Total trading volume across Korea’s top five exchanges declined ~48% year-on-year. Market focus is shifting rapidly from retail to institutional participants.
This shift has also changed how overseas crypto foundations approach Korea. As Solana was adopted by Shinhan Card and Avalanche by Mirae Asset Securities, foundations entering the domestic market have shifted primary focus from exchange trading volumes to collaboration with financial institutions and large enterprises. The community meetup model—once instrumental in driving retail liquidity—is no longer effective.
The outcome of this market restructuring is expected to become visible at KBW 2026 in Seoul this September—a flagship event consistently reflecting mainstream market conditions. Reviewing the confirmed speaker list, traditional finance professionals already constitute the majority. Last year, overseas foundations competed through token-incentivized community-side activities; this year’s focus is expected to shift toward substantive business discussions.
Tiger Research is the official research partner of KBW 2026.
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