The government of South Korea is pushing its crypto norms in full force resulting in a number of crypto exchanges shutting down. On the other hand, the Korean police have regularly cracked down on the cases of crypto scams in the country. However, in the latest of them, the South Korean Customs Service has confiscated a sizeable amount unearthing a crypto scam.
According to the Yonhap News Agency, Korean Customs Service has confiscated nearly $750 million in false remittances. Keep in mind that the number is only for crypto transactions of this year.
Looking at the report, the country has seen a drastic hike in illicit foreign exchange transactions using the new asset class. According to the Customs Service, the surge in illicit foreign exchange transactions is likely due to ‘kimchi premium’. But what is it?
‘kimchi premium’ is the gap in crypto prices between exchanges in South Korean exchanges compared to foreign exchanges. This is due to a lack of high-return investment options for investors in South Korea.
In fact, the Korea Customs Service quoted:
“Last year, illegal foreign exchange transactions also decreased due to the reduction of foreign exchange transactions and trade volume due to Corona 19, but it is on the rise again this year…We need to come up with an effective response plan.”
The South Korean Customs Service also revealed that the number of illegal foreign exchange transactions amounted to 1.2 trillion won ($1.01 billion). As a matter of fact, last year, they had seized around 718.9 billion won ($605 million).