2025 Repositioning Round: When Upbit Chooses the International Route Instead of 'Kimchi Coin'

South Korea’s leading cryptocurrency exchange Upbit has just sent a notable signal through its listing policy. Out of 54 new tokens added in 2025, only one domestic project – Story (IP) – was selected. The rest are established international assets traded on major global exchanges. This number is no coincidence; it reflects a profound turning point in the strategy of South Korea’s blockchain industry.

Suggestive Data: When Domestic Projects Are ‘Pushed Out’

Upbit holds approximately 70% of the cryptocurrency trading market share in South Korea, making its decisions a “compass” for the entire domestic market. However, this cautious approach inadvertently highlights a concerning reality.

Not only does it limit the listing of ‘Kimchi coins’ – slang for crypto projects developed by Korean teams – but it also intensifies the removal of domestic tokens. In 2025, Upbit has delisted ten cryptocurrencies, seven of which originate from Korea. This amounts to a systemic decision: prioritize global assets, bid farewell to local innovations.

This imbalance is a stark contrast to the 2017-2018 period when ‘Kimchi coins’ often led historic rallies. Now, instead of market heroes, they are becoming “foreign cheeses” in the national investment portfolio.

Legal Framework: Silent Pressures Forcing Exchanges Into Corners

The main driver behind Upbit’s “conservative” policy is legal pressure from the Korean government. After FATF’s Travel Rule and stricter anti-money laundering (AML) guidelines were implemented, exchanges are under unprecedented scrutiny.

Regulators have made it clear: if a token listed on Upbit later encounters legal issues or security scandals, the exchange must bear responsibility. Penalties could include expulsion from the Korean banking system – a “clinical death” for any trading platform.

Therefore, Upbit and other major competitors (Bithumb, Korbit) have established ultra-stringent vetting procedures for domestic projects:

• Korean FIU compliance audit: Mandatory, costly, and time-consuming
• Full team background checks: Not required for established international tokens
• Legal opinions from Korean law firms: Mandatory, often waived for top-5 global tokens
• Market application proof for Korea: Standards three times higher than just demonstrating global trading volume

This process effectively creates a “barrier offshore”: Korean blockchain startups face higher costs, longer timelines, and uncertain outcomes. Meanwhile, international tokens only need to “prove” success elsewhere – their mere existence suffices as evidence.

‘Reactive’ Instead of ‘Proactive’ Regulations: A Strategic Mistake

Comparative insights from other countries reveal the issue more clearly. Markets like the UAE and Switzerland have created legal “sandboxes,” allowing projects to test under controlled oversight. Japan, despite strict checks, has transparent and clear procedures from the Financial Services Agency (FSA) – businesses know exactly what to do.

In contrast, Korea’s model is described by experts as “reactive regulation” – laws clarified only after problems arise. This creates an atmosphere of uncertainty: exchanges do not know the real limits, so they impose self-censorship. The result is an unnecessary “coldness” spreading across the ecosystem.

Moreover, Korea relies on verified real-name bank accounts for crypto transactions. This adds another layer of control: traditional banks, fearing penalties, impose strict conditions. This effect resembles a “three-layer lock” around exchanges and startups.

The Turning Point of Korean Chaebols: From Public Ambition to Silence

A significant sign is the retreat of Korean chaebols – giant conglomerates once planning ambitious blockchain projects.

Major players like Samsung, LG, Hyundai had plans to develop blockchain platforms, issue tokens, or build Web3 ecosystems publicly. But under current legal conditions, Korean chaebols are shifting focus. Instead of consumer-facing public projects, they now concentrate on private enterprise blockchain solutions – areas less scrutinized by regulators.

This shift is not a step back in ambition; it’s a survival strategy. Chaebols know that “wisdom is better than burning out”: they keep the Web3 flame alive, but in the shadows.

Ordinary Investors: Where Are They Being Pushed?

For millions of Korean retail investors, this trend creates a new reality: their portfolios are increasingly “internationalized” by necessity.

The benefits of investing in ‘Kimchi coins’ – owning a stake in local companies or familiar ideas – fade away. Instead, they mainly hold Bitcoin, Ethereum, Solana, and other global tokens. On one hand, this is positive (deeper liquidity, more stable prices, and the reduction of the ‘Kimchi premium’ – when crypto prices in Korea are higher than elsewhere). But on the other hand, it means Korean investors no longer have the chance to “catch early” local blockchain projects.

Market data shows that trading pairs involving the remaining few ‘Kimchi coins’ experience high volatility, as they become “penny stocks” in an increasingly shrinking pond. Investors seeking focused exposure are shifting toward major tokens with deeper liquidity and less concentrated risk.

Experts Warn: The Balance Is Disrupted

Close observers of Korea’s blockchain scene have voiced concerns. A senior analyst at a Seoul-based fintech research firm comments: “We are witnessing a repositioning of talent and capital. When a major exchange like Upbit only lists one domestic project compared to dozens abroad, a clear message is sent: if you want success in Web3, start outside Korea.”

This effectively destroys a natural development path. Instead of Korean projects “growing” on Upbit with local investor support, they must move to foreign exchanges, competing with hundreds of other projects without home-market backing.

The blockchain community also expresses concern. They recall the golden era of 2017-2018 when ‘Kimchi coins’ often drove bull runs, and compare it to the current landscape: “The current legal framework prioritizes investor protection to the point of unintentionally stifling the innovation necessary for industry growth.”

Dangerous Boundaries: Protection vs. Destruction

This is a profound paradox. Regulations designed by Korean lawmakers to protect investors – a noble goal – inadvertently hamper the industry’s development. It’s like entering a prison cell for safety, but ending up trapping everyone inside.

Experts emphasize that without clear legal frameworks – such as the long-delayed Basic Digital Asset Act in the National Assembly – Korea risks falling behind.

Regions like Japan, Singapore, and the European Union are actively building comprehensive legal frameworks that balance investor protection with innovation. Meanwhile, Korea – once poised to become a global blockchain hub – is self-limiting.

Chain of Events: From Upbit to the Entire Industry

Upbit’s decision is not an isolated event. Other major Korean exchanges like Bithumb and Korbit follow similar models, reflecting industry consensus to mitigate legal risks by avoiding domestic projects.

This effect spreads quickly:

1. Local blockchain startups: Face listing difficulties, often opting abroad or abandoning projects.
2. Venture capital: Will seek more open markets, making it harder to support Korean startups.
3. Talent: Top blockchain developers begin relocating to Singapore, EU, or Japan.
4. Korean chaebols: Continue in the shadows, with private B2B projects, missing opportunities to lead the public industry.

FAQ: Common Questions

Why is only one ‘Kimchi coin’ listed when hundreds of new projects emerge worldwide?

Because Korea’s legal framework applies different standards to domestic projects – more difficult and costly – compared to international tokens with established trading histories on major exchanges.

Is Upbit the only exchange restricting ‘Kimchi coins’?

No. Bithumb, Korbit, and other large exchanges also adopt similar policies. This is an industry-wide reality, not unique to Upbit.

Has the ‘Kimchi premium’ disappeared completely?

It has decreased significantly and stabilized, mainly because liquidity of major international tokens on Upbit is deeper, bringing Korean prices closer to global levels.

Are Korean chaebols still interested in blockchain?

Yes, but their strategies have shifted. Instead of public consumer projects, they focus on private B2B solutions, less scrutinized by regulators.

What happens if the legal framework doesn’t change?

Korea will continue losing talent, capital, and opportunities. Other regions like Singapore, Japan, and the EU will take the lead, leaving Korea off the global blockchain map.

Final Words: A Call from Legislation

The data from Upbit – only one ‘Kimchi coin’ among 54 new projects – is not an isolated incident. It’s a clear warning: Korea stands at a crossroads.

One path offers protection and safety, but also suppression. The other offers opportunity and innovation, but requires wise regulation.

Responsibility now lies entirely with lawmakers. They must enact a clear, progressive legal framework – not just to “activate” Upbit and other exchanges to list more domestic projects, but to enable Korea to compete globally in blockchain and digital assets.

Otherwise, the exodus of projects, capital, and talent will become an unstoppable trend.