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Debt among South Korean youth is increasing, with many young individuals turning to cryptocurrency investments, leading them to bankruptcy courts, according to new statistics.
As reported by Hankyoreh on April 5, the Seoul Rehabilitation Court issued a report concerning debt-related cases for the Financial Year 2023.
The report’s authors indicated a 31% increase in applications for “personal rehabilitation” in FY2023.
They highlighted that “crypto investment” and “stock market purchases” are contributing to the growing number of cases among individuals aged 20-29.
South Korean Youth: Issues with Crypto Investments?
The Seoul Bankruptcy Court conducts an annual survey on Personal Rehabilitation and Bankruptcy Case Statistics.
This year’s findings revealed that 19,379 individuals sought rehabilitation or bankruptcy in FY2022, an increase from 14,826 in FY2021.
In South Korea, the rehabilitation system allows individuals unable to repay their debts to avoid formal bankruptcy by adhering to court-mandated debt repayment plans.
If they do not comply with these plans, the courts initiate bankruptcy procedures.
The Seoul Bankruptcy Court observed that applications for personal rehabilitation from individuals in their 20s have “consistently increased” over recent years.
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In the first half of 2021, 10.3% of rehabilitation applicants were aged 20-29. This figure rose to 11% in the latter half of 2021, then to 13.8% in the first half of 2022.
In the second half of 2022, the percentage increased to 16.6%, reaching 16.8% in the first half of 2023, and hitting 17% in the second half of 2023.
According to the court’s analysis, this increase is “the result of the expansion of economic activities for individuals in their 20s, including cryptocurrency and stocks.”
More Young Individuals Engaging with Crypto, Court Reports
The same court made comparable observations in October 2023, stating:
“An increase in [insolvency] among young people appears to have been influenced by a rise in economic activities such as cryptocurrency and stock market investment.”
Many attribute the growing disillusionment among South Korean youth to escalating property prices and high unemployment rates.
Housing prices force 1.74 mil. residents to leave Seoul since 2014https://t.co/BoK79xR85q
— The Korea Times (@koreatimescokr) February 6, 2024
Some believe their only financial prospects lie in the cryptocurrency and international stock markets. Meanwhile, numerous financial advisors assert that cryptocurrency investments are “no longer optional” for young South Koreans.
Earlier this year, Judge Lee Seok-jun of the Seoul Bankruptcy Court released a paper advocating for enhanced regulation of cryptocurrencies.
Lee argued that crypto investors require greater protection, concluding that courts often lack the ability to provide this due to legislative gaps.
The post South Korean Youth Crypto Investment Driving Many to Debt – Report appeared first on Cryptonews.
