South Korea Tracked $1 Billion in Fraudulent Crypto Transactions This Year

A staggering $1 billion in fraudulent crypto-related transactions was identified in South Korea in the first half of 2022, according to new data.

According Asia Kyungjae, the figures were compiled by the Korea Customs Service and made public by legislator Kang Byung-won.

The data records all crypto-related transactions reported as fraudulent by customs officials from 2017 to June 2022.

Figures show that Customs officers have reported a total of over $2.8 billion in crypto transactions since 2017. Over $1 billion of this figure was reported in the first half of this year (January to June) . This dwarfs the figure for the whole of 2021 (600 million USD). However, this is likely because the Customs Service has stepped up its oversight of the industry over the past year as part of what it called a “crackdown” on crypto-related fraud.

All of these transactions involve cross-border bank transfers or wire transfers – or instances where individuals have been caught transporting banknotes to and from overseas destinations.

Customs officials seem to have indicated that in many cases the money was tied to OTC crypto transactions and “premium kimchi” transactions. The latter refers to scenarios in which 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 overseas and then dump coins on domestic exchanges – for profits of up to 30%.

This type of transaction violates South Korean foreign exchange law – and customs officers and prosecutors have waged war on the alleged perpetrators.

$1 Billion in Fraudulent Crypto Transactions – Political Backlash Coming?

Kang is a member of 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 they will push for legislative change – and Kang called on regulators to respond.

Kang was quoted as having said:

“We must strengthen the repression against [crypto crime] finding a way to allow financial authorities, such as the Financial Services Commission and the Financial monitoring service, to work directly with investigative agencies. We also need to improve our technical capabilities [to help fight crime like this].”