Analysis of the Transformation of the South Korean Web3 Market in the First Quarter of 2025

The South Korean Web3 market is expected to reach a significant turning point in the first quarter of 2025, gradually transitioning from a traditional investment-driven market to a mature industrial ecosystem. This report provides an in-depth analysis of the key regulatory developments during this transformation and the strategic positioning of global projects in South Korea.

Main Findings

1. The South Korean Web3 market is evolving from simple "liquidity export" to a structured autonomous industrial ecosystem.

2. The roadmap launched by the Financial Services Commission allows institutional entities to conduct cryptocurrency trading through corporate accounts, marking a significant regulatory breakthrough.

3. Global projects such as Avalanche, TON, Ripple, and Solana are actively establishing long-term development foundations in South Korea, focusing on building developer communities and hosting hackathon events.

Market Transformation: From Liquidity Export to Industrial Ecology

Despite the high activity level of retail investors in South Korea and ample market liquidity, the construction of institutional infrastructure for its Web3 industry has been progressing slowly. Regulatory focus is more on investor protection rather than ecological development, which has somewhat limited the overall growth of the industry.

Main obstacles include:

1. Corporate accounts are subject to restrictions when associated with cryptocurrency exchanges.
2. The threshold for obtaining a Virtual Asset Service Provider (VASP) license is relatively high.

These systemic constraints, combined with investor activities far exceeding the local ecological maturity, have led some projects to view South Korea primarily as a customer acquisition channel. However, the market development in the first quarter of 2025 indicates that South Korea has the potential to shift from a speculation-driven market to an industry revitalization-oriented market.

Regulatory Progress: Opening Up Cryptocurrency Trading for Corporate Accounts

The Financial Services Commission announced the "Roadmap for Enterprise Participation in the Cryptocurrency Market" on February 13, 2025, planning to gradually lift the seven-year restrictions on corporate cryptocurrency trading.

• Phase 1 (starting from Q2 2025): Accounts will be opened to law enforcement agencies, non-profit organizations, and cryptocurrency exchanges, limited to asset settlement purposes.
• Stage Two (starting in the second half of 2025): Allow professional investors such as listed companies and registered investment firms to engage in trading.
• Phase Three (Medium to Long Term): Fully open the market to ordinary enterprises

This policy change lays the legal foundation for South Korean companies to engage in Web3 business, with the potential to enhance market stability by introducing institutional investors with structured risk management and long-term strategies, and to promote the diversification of financial services such as cryptocurrency funds and custody services.

However, this reform may also bring some risks, such as the phased relaxation of regulations potentially leading to an imbalance between supply and demand, putting downward pressure on prices; with the entry of listed companies and institutional investors, the likelihood of the government strengthening tax oversight increases; the conservative risk management of institutional investors may lead to concentrated holdings of Bitcoin, raising concerns about the decline in the activity of the altcoin market.

Strategic Layout of Global Web3 Projects

Numerous international teams are actively recruiting talent from South Korea and establishing substantive cooperation, demonstrating a strategic shift from superficial marketing to building a sustainable, builder-led local ecosystem. This long-term layout not only supports the growth of individual projects but also enhances the overall competitiveness of the South Korean Web3 industry.

project support

Avalanche and the TON Foundation support local teams in South Korea to build the ecosystem. Avalanche regularly holds demo days to showcase available products and attract users, while the TON Foundation has launched the "TON Society Korea Builder" program to provide systematic support.

Hackathon

The large hackathon event hosted by XRPL Korea (Ripple) and Superteam Korea (Solana) showcased the strong builder ecosystem in South Korea. These events not only attracted a large number of participants but also provided builders with a clear path to market entry.

Conclusion

In the first quarter of 2025, the South Korean Web3 market will undergo a key transformation, shifting from an investment-driven environment to a mature industrial ecosystem. Regulatory progress will lay the foundation for structured market participation, while ongoing ecological development efforts of global Web3 projects will support the South Korean market in achieving a long-term growth positioning.

At the same time, the Bank of Korea's Central Bank Digital Currency (CBDC) "Han River Project" completed its first real-world transaction with retail users, major commercial banks began exploring the issuance of a stablecoin pegged to the Korean won, and the Bank of Korea stated that it will play a more active role in future regulatory legislation.

In terms of infrastructure, the discussion of the "one exchange - multiple banks" system indicates potential structural breakthroughs, which are expected to significantly enhance market flexibility and user access.

Overall, these developments clearly demonstrate the evolution of South Korea's Web3 sector towards a sustainable industrial ecosystem. After years of regulatory constraints and structural inefficiencies, South Korea is entering a new stage characterized by policy synergy, institutional participation, and the initial signs of industry-level growth.