South Korean cryptocurrency markets are facing potential volatility as the country grapples with political turmoil following President Yoon Suk-yeol’s short-lived attempt to impose martial law. The president’s declaration, enacted Tuesday night and rescinded just six hours later, sparked widespread outrage and has led to impeachment proceedings initiated by a coalition of 191 lawmakers.
The abrupt imposition of military control, ostensibly aimed at quelling criticism from the left-wing opposition, backfired dramatically. Citizens, opposition parties, and even members of Yoon’s own People Power Party condemned the move. The impeachment bill, backed by six political parties, is expected to be put to a vote as early as this Friday or Saturday, according to MBC News.
The political upheaval has already impacted the cryptocurrency market. Local exchanges Upbit and Bithumb experienced price plunges and system outages due to a surge in traffic immediately following the martial law declaration. While prices have since recovered, analysts predict continued volatility.
“Further developments, such as the potential impeachment proceedings, could introduce volatility,” said Min Jung, research analyst at Presto Research. Jung believes the impact will likely be confined to the domestic market and remain short-term.
However, Seunghwa Lee, Head of Research at DeSpread, cautions that the political instability could exacerbate global market volatility for certain cryptocurrencies popular among Korean traders. Ripple’s XRP, for example, experienced a sharper decline of 15% during the martial law period compared to other cryptocurrencies, according to CoinGecko data.
“Given the significant influence of South Korean investors, political events that dampen investor sentiment could have a noticeable impact on global markets,” Lee explained.
The situation has drawn comparisons to the U.S. Securities and Exchange Commission’s recent crackdown on the domestic crypto industry. Peter Chung, Head of Research at Presto, criticized both actions, stating, “Both are products of an ivory tower mindset—detached from reality and driven by their self-serving narratives—causing grave harm to society and ultimately leading to their own demise.”
