Bloomberg

Recent political developments in the US pushed crypto market to unprecedent levels with Bitcoin recently reaching an all-time-high of $99K. However, the developing political chaos in South Korea is reversing some of these gains.

The country plunged into political chaos today (Tuesday) when President Yoon Suk Yeol declared emergency martial law. The Head of state accused the opposition Democratic Party of Korea (DPK) of plotting rebellion and undermining the nation's government, the Korea Times reported.

Bitcoin and XRP Prices Affected

This extraordinary decision has escalated tensions in the country’s already polarized political landscape while triggering shockwaves in cryptocurrency prices, especially among the region's exchanges.

At the time of publication, XRP was down 12% in the past day to trade at $2.45, according to CoinMarketCap. This is despite the crypto, now ranked 3rd with a market cap of $139 billion, soaring 100% in the weekly chart.

XRP Price Chart, Source: CoinMarketCap

The political developments have also affected the leading cryptocurrencies with most tokens now flashing red lights. Bitcoin is down 1.555 in the past day to $95k, while Ethereum has also dropped nearly 3%.

In a televised address, Yoon accused the opposition of paralyzing the government through anti-state activities and described the declaration of martial law as essential to safeguarding the nation’s democratic foundations.

According to Yoon, this initiative is aimed at eradicating pro-North Korean forces and protecting the constitutional order of freedom. Bitcoin and XRP saw sharp, two of the recent top performers in the sector, temporarily declined up to 30% on South Korean exchanges like Upbit, Coindesk reported.

Trading volumes on local platforms, which often rival global giants such as Binance and Coinbase, surged as traders reacted to the news. Upbit and Bithumb, two of South Korea's largest cryptocurrency exchanges, issued notices warning users about delayed site performance due to the spike in activity.

Political Uncertainty in South Korea

The tipping point reportedly came when the DPK pushed through a downsized budget bill and initiated impeachment motions against senior government officials, including the state auditor and the chief prosecutor.

Yoon further reportedly accused the DPK of shielding its leader, Lee Jae-myung, from ongoing criminal trials. Under South Korea's constitution, martial law reportedly grants the president sweeping powers, including the ability to restrict freedoms such as press, assembly, and judicial independence.

The DPK, which holds a majority in the 300-seat National Assembly, could technically terminate martial law through a vote. However, access to the assembly was reportedly blocked shortly after Yoon's declaration, preventing immediate action.