South Korean authorities have revealed cases of crypto-fraud for $1 billion

The South Korean MP said that after strengthening the supervision of the crypto industry in the first half of 2022, customs revealed fraudulent crypto transactions worth $1 billion.

Kang Byung-won revealed that since 2017, customs officials have recorded a total of more than 3.9 trillion won ($2.8 billion) in fraudulent crypto transactions. Of these, more than 1.5 trillion won ($1 billion) was recorded from January to June 2022. This is much more than in the whole of 2021 – 826.8 billion won ($600 million).

The South Korean customs service last year launched a program to prosecute cryptocurrency scammers and tightened control over digital assets. The MP clarifies that all fraudulent cryptotransactions were related to international fiat bank or electronic transfers and incidents involving the transportation of banknotes abroad.

“The functionality of digital assets to enable them to participate in international transactions requires enhanced technical capabilities and joint oversight from regulators and investigative agencies,” Kan said.

Customs officials explain that most of the scams involve over-the-counter cryptocurrency trading and the use of the so-called kimchi premium. The kimchi premium is a type of exchange scam in which South Korean traders buy cryptocurrencies abroad, where they are cheaper, and sell them 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 reported that, as part of a major investigation, the Financial Supervisory Service (FSS) was looking into cases of illegal bitcoin trading. A month later, South Korean regulators reported that they had arrested 16 people who took advantage of the kimchi premium. In 2021, the South Korean authorities said that after tightening control over crypto transactions, the number of cases of such fraud began to decline.