South Korean authorities report rise in illicit cryptocurrency operations

From January to August 2021, the volume of illicit currency operations using digital assets in South Korea totaled 812.2 billion won (~$687 million). Yonhap News reports, citing the customs service.

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The figure is 40 times higher than the volume of similar transactions in 2020.

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According to the publication, the crypto scheme is used to circumvent currency controls. It involves buying Bitcoin on local exchanges with currency received from foreign clients. The asset is sold on Korean platforms, funds are converted to cash and delivered to the recipient named.

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The customs agency also detected false transfers of funds abroad allegedly for cryptocurrency trading this year amounting to 885.6 billion won (~$749 million). Such actions are punishable by a fine.

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The growth in illicit digital-asset operations in South Korea is thought to have been influenced by the so-called ‘kimchi premium’, when Bitcoin in South Korea is sold at a higher price than the market.

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According to a representative of the National Assembly’s Planning and Finance Committee, the increase in illicit currency operations in 2021 is linked to the recovery of external trade, which had contracted sharply due to the pandemic.

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“They [illegal currency operations] are increasing again this year. We need to develop an effective plan of response,” he added.

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As reported in July, South Korea’s customs service said that in just two months it identified 33 people who carried out crypto-related illicit cross-border transactions totaling more than 1.69 trillion won ($1.43 billion).

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