Bitcoin’s ‘Kimchi Premium’ Reaches Two-Year High

The premium on South Korean cryptocurrency exchanges compared to global averages has surged to a 27-month high of 10.32%. This data is provided by analysts at CryptoQuant.

This phenomenon is shaped by local regulations that hinder arbitrage. Non-residents are barred from accessing local platforms. South Korean investors, under the Foreign Exchange Transactions Act, may face liability if they purchase digital assets on overseas CEX.

With limited supply, active demand can lead to imbalances and significant price disparities.

According to CoinGecko, at the time of writing, digital gold is priced at $70,670–$70,880 on popular platforms Upbit, Bithumb, and Korbit, compared to $66,870 on Binance.

In August 2022, South Korea’s Financial Services Commission charged 16 foreign cryptocurrency platforms with providing services to residents without registration.

A month prior, the FSS launched an investigation into alleged facilitation by local banks of overseas transfers to bitcoin exchanges amounting to $6.5 billion, associated with the ‘kimchi premium’.