South Korean crypto exchanges recorded a 78% decline in operating profit in the first half of 2026 as trading activity, market capitalization and won-denominated customer deposits contracted. A Korea Financial Intelligence Unit and Financial Supervisory Service survey of 26 licensed virtual asset service providers found that combined market capitalization fell 33%, or 28.3 trillion won, to 58.9 trillion won, while average daily trading volume dropped 44% to 3.1 trillion won and won deposits fell 35% to 5.2 trillion won. Regulators linked much of the market decline to Bitcoin's 33% fall to $58,559 by the end of June and again warned about small tokens listed on only one domestic exchange. The contraction coincided with substantial transfers of funds offshore, where Korean users can access perpetual futures and leveraged products unavailable locally. Tiger Research and Chainalysis estimated that about 700 trillion won, or $530 billion, left domestic exchanges between 2021 and 2026. A planned 22% tax on annual crypto gains above a 2.5 million won deduction, due to begin in 2027, has also prompted calls for a delay.