09 Apr

According to recent data, the amount of debt owed by young people in South Korea is rising, and many of them are driven to bankruptcy court by their cryptocurrency investments.

A report on debt-related cases for the Financial Year 2023 was released by the Seoul Rehabilitation Court on April 5, according to Hankyoreh.

The authors of the paper reported a 31% increase in applications for "personal rehabilitation" in FY2023.

The authors observed that an increase in cases for individuals between the ages of 20 and 29 was being driven by "stock market purchases" and "crypto investment."

Youth in South Korea: Are Your Crypto Investments Wrong?

A report on the Personal Rehabilitation and Bankruptcy Case Statistical Survey is produced annually by the Seoul Bankruptcy Court.

According to this year's statistics, the number of people who filed for bankruptcy or rehabilitation in FY2022 increased from 14,826 to 19,379 in FY2022.

In South Korea, if debtors agree to follow court-appointed repayment arrangements, they can avoid filing for bankruptcy through the rehabilitation system.

If they don't follow these plans, the courts handle bankruptcy procedures.

Applications for personal rehabilitation from individuals in their 20s have "steadily increased" over the past three years, according to the Seoul Bankruptcy Court.

10.3% of rehabilitation candidates were between the ages of 20 and 29 in the first half of 2021. In the second half of 2021, the percentage increased to 11%, and in the first half of 2022, it increased to 13.8%.

The percentage increased to 16.6% in the second half of 2022, 16.8% in the first half of 2023, and 17% in the second half of 2023.

That increase is "the result of the expansion of economic activities for people in their 20s, including cryptocurrency and stocks," according to the court's study.

A court finds that more youth are utilizing cryptocurrency

Similar findings were made by the same court in October 2023, when it asserted:

"A rise in economic activities such as stock market investment and cryptocurrency seems to have contributed to an increase in [youth] insolvency."

Many have attributed the growing disillusionment among South Korean young on high jobless rates and soaring real estate costs.

Some claim that foreign stock markets and cryptocurrency are their sole sources of financial hope. For young South Koreans, however, many financial counselors claim that purchasing cryptocurrency is "no longer optional."

Judge Lee Seok-jun of the Seoul Bankruptcy Court wrote a report earlier this year advocating for increased regulation of cryptocurrencies.

According to Lee, cryptocurrency investors require greater security. He came to the conclusion that legislative oversights frequently leave courts unable to provide this.

April 2024, Cryptoniteuae

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