Trading volumes at South Korean cryptocurrency exchanges rose 45% in two days after the Binance hack — the largest theft in cryptocurrency history — sent bitcoin and other major tokens tumbling. On Upbit, hourly turnover in the dollar stablecoin tether (USDT) jumped to about 27 times the level of the previous hour immediately after the suspected breach surfaced. Analysts said investors turned to stablecoins to limit losses from further price declines while waiting for the next buying opportunity.
Combined turnover at Korea's five largest exchanges rose 24.8% to $1.782 billion on the 30th, the day of the Binance hack, from $1.428 billion on the 29th, according to data from cryptocurrency research firm CoinGecko released on the 3rd. Volume climbed a further 16.6% to $2.077 billion on the 31st. The period coincided with a sharp drop in major token prices after the world's largest exchange suffered the biggest hacking loss in cryptocurrency history.
Coinone posted the sharpest increase. At 9 a.m. on the 31st, its turnover was up 142.5% from the same hour on the 29th, the day before the incident. Digital X followed at 63.4%, ahead of Upbit at 34.7%, Bithumb at 32.9% and Gopax at 1.1%. Fee-waiver promotions underway at Coinone and Digital X likely contributed to their steeper gains. In absolute terms, Upbit saw the largest increase, adding about $293 million over the two days, or 45.1% of the total gain across the five exchanges.
Stablecoins such as USDT drew the bulk of the activity. Tether turnover on Upbit rose from about 630 million won at 5 a.m. on the 30th to 17.1 billion won at 6 a.m., a 27-fold expansion in a single hour, according to Upbit Data Lab. Tether on Upbit had traded 0.04% below overseas prices around 2 a.m. on the day of the hack but was changing hands at a 1.16% premium by 6 a.m.
The surge in USDT trading has been attributed to concerns that token prices could fall further following the Binance hack. Analysts said investors converted holdings such as bitcoin into stablecoins pegged to the dollar to avoid losses from additional declines and to set aside funds for their next purchases. Dollar stablecoins are widely used to buy other cryptocurrencies on overseas exchanges and can also be held in private wallets and swapped for other tokens on decentralized exchanges (DEXs).
"The assets stolen in this case include major holdings that many Korean investors also own, so investors worried about further declines may have moved funds into USDT," said Ahn Kwang-ho, a researcher at Tiger Research. "It can be seen as a move to hedge against price declines in their holdings while securing funds to reinvest once the market stabilizes or a buying opportunity arrives."
Some investors may also have moved assets to domestic exchanges out of concern over security at overseas platforms. Binance said that in the nine and a half hours after it began a phased resumption of withdrawals at 3 p.m. on the 1st, through 12:30 a.m. on the 2nd, $4.649 billion flowed out and $1.010 billion flowed in. Net outflows of about $3.640 billion, or roughly 4.883 trillion won, amounted to 2.1% of Binance's $171 billion in total assets under management as of the 28th.
"When a large exchange is hacked, investors may try to move assets to other exchanges out of concern about additional losses or suspended withdrawals," Ahn said. "The flow of funds into other exchanges such as OKX after Binance resumed withdrawals may reflect that same pattern."
Original reporting by Kim Jung-woo for Seoul Economic Daily.
AI-translated from Korean. Quotes from foreign sources are based on Korean-language reports and may not reflect exact original wording.
Watch · Seoul Economic Daily
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