FSS began an investigation in July into alleged facilitation by local banks of overseas transfers to crypto exchanges worth $6.5 billion, linked to the ‘kimchi premium’. This was reported by Cointelegraph.
The regulator will examine the activities of financial institutions from January 2021 to June 2022 for potential capital outflows from the country and money laundering.
Earlier media reported that this concerned the country’s largest banks — Woori Bank and Shinhan Bank. Reports showed that the majority of transfers were initiated from local crypto exchanges to various accounts of Korean companies. Some participants in these schemes have been arrested.
The publication did not rule out that the investigation could reveal a broader scale of abuses. It is expected that checks into the activities of Woori Bank and Shinhan Bank will be completed on August 19. The financial institutions face fines.
“We take currency operations seriously; sanctions are inevitable”, — said Lee Bok-Hen, head of the FSS.
Through the ‘kimchi premium’, whereby Bitcoin in South Korea trades at a higher price than the market, profits can be earned from the price differentials. However, a complication is the ban on opening accounts on local crypto exchanges for foreign nationals.
According to CryptoQuant, to date the size of the ‘kimchi premium’ has narrowed to 3.4% from 20% observed in April наблюдались в апреле.
16 августа журналист Колин Ву со ссылкой на Chosun biz сообщил что правительство Южной Кореи провело расследование в отношении незарегистрированных зарубежных бирж, включая MEXC, Phemex, Kucoin, Bitrue, Poloniex, CoinEx и ряда других. Местная платформа Bithumb заявила, что ограничит депозиты и снятие средств с некоторых бирж из этого списка.
According to Chosun biz, the South Korean government has investigated unregistered overseas exchanges, including MEXC, Phemex, Kucoin, Bitrue, Poloniex, CoinEx,BTCEX etc. Bithumb said it will limit deposits and withdrawals from some exchanges. https://t.co/DxUHvWZ8U7
— Wu Blockchain (@WuBlockchain) August 16, 2022
In October 2021, South Korean authorities registered a rise in illegal currency operations using digital assets. It is believed this was influenced by the ‘kimchi premium’.
In July 2022 the country delayed the introduction of the tax on bitcoin traders until January 1, 2025.
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