South Korean authorities record increase in illegal cryptocurrency transactions
From January to August 2021, illegal currency transactions involving digital assets in South Korea amounted to 812.2 billion won (~£504,15 million). This was reported by Yonhap News, citing the Customs Service.
The figure was 40 times the volume of similar transactions for 2020.
According to the publication, the cryptocurrency scheme is used to circumvent currency restrictions. It consists of buying bitcoin for currency received from foreign customers on local exchanges. The asset is sold on Korean exchanges and the funds are converted into cash and delivered to the intended recipient.
Also this year, the customs authority detected false transfers of funds abroad allegedly for cryptocurrency trading amounting to 885.6 billion won (~£549,65 million). These actions are punishable by a fine.
The rise in illegal digital asset transactions has allegedly been influenced by the so-called "kimchi premium", where bitcoin in South Korea is sold at a higher price from the market.
According to a spokesperson for the National Assembly's Planning and Finance Committee, the increase in illegal currency transactions in 2021 is due to the recovery of foreign trade, which has been significantly reduced due to the pandemic.
This year, they [illegal foreign exchange transactions] are increasing again. We need to develop an effective response plan, he added.
Recall that in July, South Korea Customs said it had identified 33 people who had made illegal cross-border transactions involving cryptocurrencies worth more than 1.69 trillion won (£1.04 billion) in two months alone.