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The South Korean MP said that after strengthening supervision of the crypto industry in the first half of 2022, customs revealed fraudulent crypto transactions worth $ 1 billion.
Kang Byung-won reported that since 2017, customs officials have recorded a total of fraudulent crypto transactions worth more than 3.9 trillion won ($ 2.8 billion). Of these, more than 1.5 trillion won ($ 1 billion) was recorded from January to June 2022. This is much more than for the whole of 2021 – 826.8 billion won ($ 600 million).
South Korea’s customs service last year launched a program to prosecute cryptocurrency scammers and stepped up scrutiny of digital assets. The deputy clarifies that all fraudulent crypto transactions were associated with international fiat bank or electronic transfers and incidents for the transportation of banknotes abroad.
“The functionality of digital assets, allowing them to participate in international transactions, requires the strengthening of technical capabilities and joint supervision by regulators and investigative bodies,” Kang said.
Customs officials explain that in most cases, the fraud is related to over-the-counter cryptocurrency trading and the use of the so-called kimchi premium. The kimchi premium is a type of exchange fraud in which South Korean traders purchase cryptocurrencies abroad, where it is cheaper, and sell on local exchanges where prices are higher. As a result, the profit reaches 30%.
Such transactions violate South Korean currency laws. In July, law enforcement agencies reported that as part of a major investigation, the Financial Supervisory Service (FSS) is checking cases of illegal bitcoin trading. A month later, South Korean regulators said they had arrested 16 people who had taken advantage of the kimchi prize. In 2021, the South Korean authorities said that after strengthening control over crypto transactions, the number of cases of such fraud began to decline.
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