16 People Arrested in South Korea for Trading Crypto Illegally

Key Takeaways:

  • Customs officials in South Korea have nabbed 16 people involved in unlawful foreign exchange transactions.
  • Since February, the Korea Customs Service has discovered more than 2.7 trillion won ($2 billion) in unlawful foreign exchange transactions involving virtual assets.

According to a local news source, Newsis, South Korean customs officers detained 16 persons on Tuesday for engaging in unlawful foreign exchange operations.

According to local media sources, two of the 16 individuals will face legal action, seven received fines for incompetence, and the rest seven are still under investigation.

The arrests are the result of a Korea Customs Service investigation that turned up over 2.7 trillion won ($2 billion) in unauthorized foreign exchange transactions involving virtual assets since February.

Numerous people who were detained are still being interrogated by police, and it has not yet been decided whether or not their cases should be referred to the prosecution service. People have already faced penalties.

According to Lee Min-Geun, director of the Seoul Customs Investigation Bureau, there is a significant chance that these foreign exchange transactions breached the Foreign Exchange Transactions Act. 

As per the Foreign Exchange Transactions Act, everyone was detained. All of the main commercial banks in the country are being investigated by financial regulators for possible carelessness.

They assert that the entire amount of illicit kimchi premium trade through South Korean banks may reach USD 6.5 billion, though the exact figure will probably be reduced after the regulators’ audits are finished.

The pricing difference between South Korean exchanges and foreign exchanges is known as the “kimchi premium.” The price discrepancy may result from South Korean investors’ limited access to high-return investment opportunities.

A number of the illegal foreign exchange transactions were connected to offshore cryptocurrency exchanges, according to customs inspectors.

Some of the individuals involved had set up businesses like illegal remittance agencies and then concealed trade proceeds from foreign buyers using domestic banks.

This is the newest approach in South Korea’s prosecution of illegal cryptocurrency operations. The Korea Financial Intelligence Unit, the country’s money laundering agency, blacklisted 16 cryptocurrency firms this month for functioning without authorization.

Ko Kwang-hyo, director of tax policy at the South Korean Ministry of Economy and Finance, recently declared that the country would postpone the much-debated 20% cryptocurrency tax for another two years. The original proposal, which would levy an additional 20% tax on cryptocurrency gains exceeding KRW 2.5 million (US$1,900) in a calendar year, is still in force.

Aadrika Sharma
Aadrika Sharma

I enjoy writing and try to learn new things every passing day!

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