South Korea courts write off ₱891.04 million ($15 million) in crypto debt
South Korea's rehabilitation courts have expanded to six locations nationwide as the country grapples with a 92% household debt-to-GDP ratio. The system handled debt relief cases tied to speculative crypto trading losses amid broader financial strain.
Key Takeaway
South Korea's 92% household debt crisis forced courts to write off crypto losses before bankruptcies spiraled.
South Korea's government provided ₱891.04 million ($15 million) in debt relief to 269 individual crypto traders in December 2025, as courts scrambled to prevent personal bankruptcies from overwhelming the financial system.
The country's household debt-to-GDP ratio reached 92% in 2025. Seoul Rehabilitation Court caseloads jumped almost 13% since 2023, handling around 28,000 cases in 2024 alone. The government capped its own debt growth target at 3.8% while dealing with a wave of over-leveraged retail investors who lost money on crypto trades.
South Korea opened three new rehabilitation courts this month in Daejeon, Daegu, and Gwangju, bringing the total to six locations up from one in Seoul when the system launched in 2017. Two additional branches opened in Suwon and Busan in 2023 as the debt crisis deepened.
Seoul Bankruptcy Court Judge Lee Seok-jun called on the government in 2024 to create more regulations to protect crypto investors. The Daegu court warned it will punish any debtor who intentionally conceals crypto purchases by disguising them as failed investments. Critics told local outlet EToday that sweeping measures to write off investment losses could lead courts into moral difficulties, with the government writing off the ₱891.04 million ($15 million) for 269 traders in December 2025 as the first major test of the expanded court system.
This article was written based on reporting from Dlnews.
