The Korea Customs Service has identified 5.6 trillion Korean won (US$4.3 billion) worth of illegal foreign currency transactions last year involving cryptocurrencies, or trading to take advantage of higher prices for certain tokens in South Korea compared with overseas markets, according to local media reports.
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Fast facts
- Cryptocurrencies in South Korea tend to trade at higher premiums compared to outside the country as local authorities prevent overseas platforms from servicing local investors, and likewise investors overseas are barred from using local platforms.
- The identified illicit trade mostly involves cases where the purpose of overseas financial transactions was misrepresented, Yonhap reported. Many of the transactions sought to purchase cryptocurrencies at a lower price overseas for sale in South Korea.
- A total of 15 cases of illegal transactions involving cryptocurrencies accounted for nearly 70% of the total amount of 8.2 trillion won across 1,983 illicit overseas trades detected by customs, Yonhap reported, citing the Korea Customs Service.
- The amount of such illegal foreign transactions caught by the customs service surged 211% from 1.8 trillion won in 2021.
See related article: South Korea issues guideline on cryptocurrencies as securities tokens ahead of planned legalization