Ki Young Ju: South Korea’s economic crisis could drive crypto businesses overseas

CryptoQuant CEO warns of economic instability and calls for reform in South Korea’s financial policies.

In a Dec. 19 post on X, Ki Young Ju, the CEO and founder of CryptoQuant, expressed grave concerns about the status of the Korean economy — critiquing the nation’s economic policies, pointing out, in particular, the rising value of the Korean Won and the unattractiveness of domestic assets.

“Domestic assets, including the Korean Won, are not attractive at all,” Ju said, highlighting the ineffectiveness of government initiatives to keep the currency stable.

Ju pointed out that the government’s efforts to keep the currency stable have mostly failed given the state of the economy. He emphasized that the issue is made worse by the rapidly rising currency rate, which is causing economic instability.

Ju also pointed out that the USDT value on Upbit, a major South Korean exchange, had already caught up to the IMF rate which can be a bad sign for the South Korean economy especially in terms of cryptocurrencies.

One important metric for assessing a currency’s value in relation to others using international financial standards is the IMF rate.

The KRW is declining against the dollar at an alarming rate when the value of USDT, a stablecoin based on the US dollar, equals the IMF rate on local markets like Upbit. Since investors can use USDT or other stable assets as a hedge against the volatility of the national currency, this alignment between the USDT and the IMF rate may be a sign of a lack of confidence in the Korean economy.

This can be interpreted by South Korea as a warning indication of capital flight, a phenomenon in which companies and investors relocate their assets abroad in order to shield them from devaluation or inflation. Because fewer people would be willing to hold the KRW, the tendency might further destabilize the local financial system and undermine the national economy.

Furthermore, this might have an effect on international investments and commerce, decreasing South Korea’s appeal to international investors. Ju’s comments demonstrate the mounting apprehension regarding the government’s response to the crisis and its capacity to stop the flow of capital out of the country.

CryptoQuant’s CEO also expressed disapproval of the way the government was addressing the matter, saying that instead of making capital stay in the nation, it ought to foster an atmosphere that would entice it to come back. Ju called for fewer restrictions and more incentives for investors to remain in Korea, saying, “the government should not forcefully hold on to capital that is fleeing overseas.”

Ju, who has operated his company in Korea for seven years, expressed increasing dissatisfaction with the South Korean government. He concluded, “I have endured this for 7 years while doing business as a domestic corporation, but now I am thinking that I should leave Korea. It is so frustrating.” His remarks, which urge for reform to stop the capital flight, reveal a deeper worry for Korea’s economic future.

South Korea witnessed severe political unrest in December 2024 as a result of President Yoon Suk Yeol’s later-retracted imposition of martial law. The National Assembly impeached him as a result, and a trial before the Constitutional Court was held to determine whether he should stay in office.

Financial institutions in South Korea have been greatly impacted by the current political unrest. The stock market has been volatile and the South Korean won has lost value, mostly as a result of international investors selling their local shares.

For example, the KOSPI index, the benchmark stock index of South Korea that tracks the performance of businesses listed on the Korea Stock Exchange, fell 2.5% from Dec. 3, the day martial law was declared, and since then it has shown bearish momentum and now trading at 2,435.93 as of Dec. 19.

Source: Google Finance

Also, one of the largest firms in South Korea and a pioneer in technology worldwide, Samsung Electronics, had a 9.3% drop in its stock price, and currently trading at 53.100 KRW. The South Korean won also continued to decline, hitting its lowest level in 15 months at 1,448.9 versus the US dollar.

In order to mitigate the risks connected with the current political and economic environment, companies and individuals are considering relocating their assets overseas as a result of the growing concerns about economic stability.

It is unclear how the government’s measures will affect South Korea’s financial institutions going forward and whether additional companies, like CryptoQuant, will be compelled to relocate to secure their survival in a more stable environment while the country experiences political and economic upheaval.