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South Korean Customs Officials Promise their Own ‘Crypto Crackdown’

Tim Alper
Last updated: | 2 min read

South Korean customs authorities have added their voices to the choir of public officials promising to “clamp down” on illegal crypto transactions – particularly those involving overseas remittances and opportunistic traders seeking to take advantage of the kimchi premium.

Source: Adobe/PRANGKUL

In a report from the Hankook Ilbo, the Korea Customs Service was quoted as saying that it would step up the “monitoring of trade finance-related crimes and foreign exchange transactions that make use of cryptoassets.”

A spokesperson also added that “cryptoassets can be used for financial crimes such as stealing assets, disguising [illicit] transactions as trade transactions or money laundering.” The Korea Customs Service said it would be “monitoring these trends” and if it found evidence of wrongdoings would “initiate investigations.”

The customs service added that its own “monitoring” efforts for “crypto transactions” would be independent of the government’s recently announced “joint crackdown.”

The spokesperson concluded that “illegal cryptoasset transactions” would “an extension of” the service’s “monitoring operations for “trade-related financial crimes and illegal foreign exchange transactions.”

As reported, the kimchi premium is a phenomenon whereby the demand for tokens such as bitcoin (BTC) and major altcoins is so high in South Korea that prices are pushed up above the global average. Some have sought to exploit this by buying tokens from overseas sellers – primarily over-the-counter vendors in China – and then sell the coins on domestic exchanges.

The government has already begun leaning on banks, asking them to restrict “suspicious”-looking remittances to China – with one major commercial bank, Woori, already falling into line.

In previous weeks, the kimchi premium has risen up to the 18% mark, but data from Scolkg at the time of writing indicated that it has shrunk back to around the 8% level – meaning that the price of BTC 1 is around USD 4,480 more expensive on the domestic market-leading exchange Upbit than the token would cost on Binance’s global platform.

Learn more:
‘Intense Crackdown’ until End of June as Seoul Fights Crypto Fraudsters
S Korean MPs Seek to Ban Crypto Felons from Returning to the Industry
South Korean City Goes to War with Tax Evaders, Will Seize their Crypto
Judge Hands Convicted Crypto Tax Evader 3-Year Suspended Jail Sentence