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The feverish demand, coupled with government rules that make sending Korean won abroad cumbersome, led to a 30% to 50% premium on the purchase price of the most popular coins, a phenomenon known as the Kimchi Premium. Traders in China -- which banned trading in digital coins last year -- used South Korea to sell crypto for fiat, or government, money, leading to a massive cash outflow to China, according to Hong Ki-Hoon of Hongik University's College of Business. South Korea's influence on the global markets was so strong that when CoinMarketCap.com, a U.S. price-tracking site, decided to remove the country's exchanges from its algorithms because of the Kimchi Premium in January, it sent global markets reeling with a $100 billion loss.

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