May 20, 2022 13:22
Close to 100,000 people in Korea have invested more than W100 million a head in plunging cryptocurrencies, according to government data (US$1=W1,278).
Altogether 5.58 million Koreans had some cryptocurrency holdings at the end of last year, the Financial Services Commission said Thursday, raising fears that the crash will reverberate throughout society.
Some 94,000 or 1.7 percent of them had more than W100 million worth of cryptocurrencies at the time, another 13 percent or 730,000 between W10 million and W100 million, and 29 percent or 1.63 million between W1 million and W10 million. The rest dabbled in small sums.
Men outnumbered women with 3.74 million versus 1.84 million. The biggest group of investors were in their 30s with 31 percent, while 26 percent were in their 40s and 24 percent in their 20s.
There are 623 different cryptocurrencies listed in Korea, but only 27 percent are major ones like Bitcoin or Ethereum, far lower than the global average of 59 percent. That means most cryptocurrencies traded in Korea are risky and niche. Their value has plummeted 59 percent on average from their peaks, 4.4 times steeper than the average fall in stock prices.
Korea is the only country in the world where more than 300 different cybercurrencies are being traded, said Kim Kab-lae, a researcher at the Korea Capital Markets Institute. More than 100 coins fail and are delisted here every year, or 541 over the last five years. Industry watchers estimate that around W1 trillion evaporated into thin air.
The recent collapse of the Luna and Terra cryptocurrencies developed by a Korean, which were thought to be stablecoins because they were pegged to the dollar, has sent shockwaves through global markets. Luna rose to eighth place in terms of global market cap or W50 trillion but plummeted 99 percent in just 72 hours after news of the coins' depegging last week and was delisted.
According to the FSC, 280,000 people in Korea had invested in Luna as of this Monday, up from just 90,000 at the end of 2021. Investors in Terra and Luna have filed a fraud complaint against Do Kwon, the founder of the cryptocurrencies.
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