Law enforcers found more than $2 billion related to illegal transactions

Crypto traders who violate trading rules arrested in South Korea

01.09.2022 - 08:15

80

2 min

What’s new? On August 30, South Korean law enforcement officers arrested 16 people involved in illegal cryptocurrency transactions, the local publication Newsis reports. The arrests stem from an investigation by the Customs Service, which found more than 2,7 trillion won ($2 billion) related to illegal transactions back in February of this year. According to the report by the authorities, two of the 16 arrested will be prosecuted, seven have already been fined for negligence, and the remaining seven are still under investigation.

Material by Newsis

Case details. Customs inspectors found that a number of illegal crypto forex transactions were linked to offshore cryptocurrency exchanges. In this, some detainees set up shell companies, such as remittance agencies, and then disguised the trade proceeds from foreign buyers using local banks.

Some of the defendants used an illegal method of arbitrage bitcoin trading at the expense of the so-called “kimchi premium.”

The kimchi premium is the difference between the price of bitcoin on South Korean exchanges and global exchanges. Due to the closed nature of the country’s financial system, market makers cannot equalize the price of the first cryptocurrency in time, due to which a difference is created, which is very different from the main rate of the asset.

Lee Min-geun, director of the Seoul Customs Investigation Bureau, said that there is a high probability that the detained criminals may have violated the Foreign Exchange Transactions Act.

Earlier, the South Korean authorities launched an investigation into banks, including Woori Bank and Shinhan Bank, over the discovery of suspicious deposits from several companies. The Financial Supervisory Service detected more than $1 billion in transfers. Most of it was transferred from an undisclosed cryptocurrency exchange.

Author:

Vasiliy Smirnov Vasiliy Smirnov

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