By Shelly Melancon (Switzerland)
In line with its ban policy on foreign crypto transactions, South Korea has seized $1.48 billion that was the proceeds from illicit foreign crypto activities. As a deterrent, it has also taken actions against those who were caught engaging in the outlawed transactions. According to reports, over 30 culprits have been fined and prosecuted for failing to comply with existing regulations.
Regulatory bodies in South Korea engaged in a joint investigation into crypto scams and money laundering, leading to the uncovering of 1.69 trillion won (almost $1.50 billion) from prohibited foreign crypto activities. Sources disclosed that 33 persons were incriminated by the country’s Customs body as having infringed on the statutory provision outlawing foreign crypto trading. The custom body stated that those who were found to have done otherwise did so in three instances.
South Korean Law Outlaws Foreign Crypto Trading
In the first instance, some suspects were said to have traded crypto on foreign crypto exchanges which South Korea already prohibits. Details revealed that this set of persons liaised with third-party bodies to transfer large sums withdrawn for the purpose of the prohibited transactions. The amount involved was said to be $700 million.
South Korea’s customs body revealed that the second instance included people who used fake remittance records to make crypto purchases from foreign crypto exchanges. One of the parties in this class had supposedly used counterfeit invoices to the sum of $308 million to transfer funds to a firm outside South Korea. The large sum of money was reportedly used to purchase cryptocurrencies from exchanges outside the Asian country. South Korea’s Kimchi premium unfortunately enables crypto prices to be overpriced. The crypto exchange was said to have profited nearly $9 million from the transaction.
The third set of people included people who had used Korean credit cards to withdraw cash while abroad in order to purchase crypto from foreign crypto platforms. Korean customs body reiterated that transferring crypto assets under the cloak of trading or using them for travel or study expenditures were totally banned. It further added that those who failed to abide by existing policies would be criminally prosecuted or fined.
South Korea Issues New Guidelines to Crypto Exchanges
Lately, the heat has been turned up against crypto exchanges in South Korea, with a recent regulation directing all exchanges to start issuing real-name based accounts in partnership with banking institutions. While compliance has been observed with some exchanges, a few other exchanges have failed to do so because some South Korean banks are reluctant to liaise with them on the directive.
Most banks expressed worries over being indicted for criminal liability arising from fraudulent crypto activities. However, regulatory bodies recently added a clause to extant crypto regulations which absolves banks from being held liable for fraudulent transactions. The clause is entitled ‘No Action Clause’ and allows government officials to decide not to hold banks responsible. Also, a new study has revealed that debts among the country’s young adult population has soared as a result of crypto-based investments and other investment products.
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