Is this the death knell for centralized crypto exchanges (CEXs), or only a temporary detour in a much longer journey? Korea’s growing adoption of Ethereum is not a straightforward tale of decentralization’s success. It’s a touchy, tricky set of proposals fraught with minefields, and honestly, it ought to scare the bejeezus out of you.

Onchain Migration: A Flight to Uncertainty?

The headlines holler, and the news appears to confirm, that Korean users are abandoning CEXs for the greener pastures of onchain environments, mostly Ethereum. Tiger Research examined 60,000 Korean wallets and found that users are engaging with moving assets across chains. Besides that, they’re active participants in DeFi and NFT space. Before you jump on the bandwagon, ask yourself: are these users truly empowered, or are they simply trading one set of risks for another, potentially greater set?

As the report notes, it’s true that Korean users are looking for global opportunities. They have to if they want to find meaningful options domestically. This pursuit of global markets onchain comes with a significant caveat: a lack of regulatory oversight. That’s what we’re describing, a Wild West kind of environment, where pump and dumps and rug pulls run rampant.

Think of it like this: Imagine switching from a regulated bank (CEX) to stashing your cash under your mattress (self-custody onchain). Yes, the upside is you have total control, but with that comes having absolutely no recourse if someone breaks in and steals it. Is that freedom really worth the risk?

Retail Rush: Are Investors Ready?

Although large transaction volumes continued to fall in Q1 2025, retail investor participation has largely sustained, even growing. That would indicate that ordinary Koreans are embracing DeFi in a very big way. Are they ready to tackle the cutting edge of decentralized finance? Do they understand the dangers of impermanent loss and smart contract exploits? Are they able to admit that someday they could be completely politically and financially wiped out?

I fear that too many investors are seeking short-term profits. They frequently fail to understand the technology and underlying technology or the risks this new tech poses. Their gaze is drawn to the siren song of airdrops and the promise of fast, easy money. If so, they could be laying the groundwork for an even more painful lesson to come.

The 6% NFT participation rate, despite a flat global market, is a case in point. When you’re driven by airdrop opportunities and pretty much everything else except actually believing in the technology, it’s just like gambling.

We are in the process of seeing an explosion in these types of victims being successfully targeted through on-chain scams. This alarming increase is mainly attributed to ignorance and the lack of regulatory safeguarding.

The shocking 93% preference for USDT over USDC in Korea is a third cause for alarm. USDT’s long track record of controversy and opacity is the stuff of legends. Even with these warning signs blinking, ChatGPT’s chokehold on the current market continues unabated. This is a troubling sign that users are prioritizing liquidity and trading pairs above stability and security.

  • Do I truly understand the technology behind this project?
  • Have I thoroughly researched the team and their track record?
  • Am I comfortable with the possibility of losing all my investment?
  • Where will I go if things go wrong?

USDT Dominance: A Red Flag for Stability?

It would be a dangerous gamble to choose a gas station based solely on price. You might waste a trip to a station that has a history of dispensing bad fuel. Sure, you paid a little less for that fuel in the immediate, but you’re killing your engine.

We know it can be tempting to get swept up in the excitement of crypto and DeFi. It's important to keep in mind that this is a very young industry and very risky business. Take care not to let your fear of missing out (Fomo) cloud your judgment. Invest responsibly, research thoroughly, and be ready to lose it all.

Expanding the infrastructure to Ethereum isn’t a bad thing, but like many things, it’s a trend we want to be careful on. It's a warning sign that centralized exchanges may not be meeting the needs of Korean users, but it's a reminder that decentralization comes with its own set of challenges. The divisions between domestic and international markets are beginning to erode. Yet, we need to be smart and recognize the risks associated with this transition.

The efficacy of this on-chain migration depends on two primary considerations. First, Korean regulators need to adjust and provide enough investor protection. Second, Korean investors should be more educated to make smarter decisions. Until then, Korea’s Ethereum gamble is a high-stakes wager.

Ultimately, the success of this onchain migration will depend on whether Korean regulators can adapt and provide adequate investor protection, and whether Korean investors can educate themselves and make informed decisions. Until then, Korea's Ethereum gamble remains a high-stakes game.