COINNEWSKOSPI Crash and New Cryptocurrency Regulatory Measures in South Korea
The South Korean stock market experienced a massive decline: the KOSPI index plummeted by 7.4%. Shares of tech giants SK Hynix and Samsung Electronics fell by 8.8% and 7.7%, respectively. The exchange was forced to halt automatic trading for five minutes due to a sharp drop in futures.
The main cause of the crisis was an announcement from Chinese company CXMT regarding the development of a new DRAM technology. The plant plans to launch server chips by the end of 2026, allowing it to outpace South Korean competitors by approximately two years. Amid these news, the US semiconductor index SOX also dropped by 2.7%, while Micron shares lost nearly 4% of their value.
Capital Outflow and Impact on the Crypto Market
Foreign investors are actively exiting Korean assets: on October 12 alone, net capital outflow from South Korean stocks reached 2 trillion won. The stock market decline is reducing interest in risky assets, including cryptocurrency. Investors may begin selling digital assets to cover losses and meet margin requirements.
Regulation and New Taxes
South Korean authorities are tightening control over the crypto industry. Websites of 27 unregistered exchanges have been blocked, including KuCoin, MEXC, Phemex, BingX, and Bitrue. Previously, restrictions affected their mobile apps; now the ban extends to web sites as well.
- Income from cryptocurrencies will be taxed starting January 1, 2027.
- The tax rate will be 22%, including local levies.
- The annual tax-free threshold is set at 2.5 million won.
