A staggering USD 1 billion worth of fraudulent crypto-related transactions has been identified in South Korea in the first half of 2022, new data shows.
According to Asia Kyungjae, the figures were compiled by the Korea Customs Service and made public by the lawmaker Kang Byung-won.
The data records all crypto-related transactions flagged as fraudulent by customs officials from 2017 to June 2022.
The figures show that customs officials have flagged a total of over USD 2.8 billion crypto-linked transactions since 2017. Over USD 1 billion of this figure has been flagged in the first half of this year (January to June). This dwarfs the figure for the entirety of 2021 (USD 600 million). However, this is likely due to the fact that the customs service has stepped up its policing of the sector in the past year as part of what it has termed a “crackdown” on crypto-related fraud.
All of these transactions involve cross-border fiat bank or wire transfers – or instances whereby individuals have been caught carrying banknotes to and from overseas locations.
Customs officials appear to have indicated that in many cases, the money has been linked to over-the-counter crypto trades and “kimchi premium” trading. The latter refers to scenarios whereby the price of bitcoin (BTC) and other tokens is higher in South Korea than elsewhere in the world. In cases like these, some traders have sought to buy “cheaper” BTC abroad and then dump coins on domestic exchanges – for profits of up to 30%.
This kind of transaction violates South Korean foreign exchange law – and both customs officials and prosecutors have been waging war on suspected perpetrators.
USD 1bn in Fraudulent Crypto Transactions – Political Backlash Incoming?
Kang is an MP for the Democratic Party, which has a large majority in the National Assembly. He is also a member of the Assembly’s Political Affairs Committee.
He and other lawmakers have indicated that they will push for legislative change – and Kang called on regulators to respond.
Kang was quoted as stating:
“It is necessary to strengthen the crackdown on [crypto crime] by finding a way to allow the financial authorities, such as the Financial Services Commission and the Financial Supervisory Service, to work directly with investigative agencies. We also need to improve our technical capabilities [to help fight crime like this].”