⚡ Martial Law Crashes South Korea's Crypto Market
posted 15 hr ago
The South Korean crypto market suffered a significant blow after President Yoon Suk Yeol imposed martial law. For example, Bitcoin’s price on the local trading platform Upbit temporarily dropped to $80,000, over 10% below the global market average of around $94,000.
Other major cryptocurrencies, such as Ripple (XRP) and Dogecoin (DOGE), also faced sharp declines, losing significant value. This situation arises primarily because South Korean traders are restricted from accessing global cryptocurrency exchanges, while foreign traders are unable to trade on local platforms. This disconnect creates what is known as the kimchi premium.
Bitcoin price snapshot from Upbit during the crash. Source: Official Upbit Website
According to Chinese journalist Colin Wu, the price divergence was exacerbated by South Korean exchanges’ decision to block institutional market makers from intervening and absorbing large sell-offs. The resulting surge in traffic further strained local platforms, causing technical issues.
While the official reasoning for martial law was to defend the nation against communist parties and remove anti-state elements, many believe the decision was politically motivated. Opposition parties, which recently secured a parliamentary majority, had refused to pass next year’s budget proposal.
Martial law grants sweeping powers to the military, which operates under the president’s authority as commander-in-chief and leader of the ruling party. This move also imposes severe restrictions on civilians, including suspension of freedoms such as speech, assembly, and protest.
At the time of writing, South Korea’s parliament passed a resolution to annul the martial law decree, effectively nullifying the president's order. The last time martial law was declared in South Korea was in 1979, following the assassination of President Park Chung-hee. That event led to a political crisis and the eventual establishment of military rule.
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