In Brief:
- The total amount detected as illegal foreign exchange transactions is 1.2 trillion won as per the Korea Customs service.
- Korea Customs service confiscated 800 billion won in illegal remittances for crypto transactions
The number of illegal foreign exchange had decreased amid the pandemic due to restricted travel activities. But soon after the covid19 situation eased this year, the illegal currency exchange reached new highs amounting to 1.2 trillion won. The amount has far exceeded last year’s overall of 718.9 billion won.
As per data received by Korea Customs Service, these illegal foreign exchange transactions include 800 billion won in cryptocurrency transactions.
The reason for the rapid increase in illegal foreign exchange transactions using virtual currency is assumed to be influenced by the “Kimchi Premium” where bitcoins have traded at much higher prices in Korea.
Kimchi premium is the gap in cryptocurrency prices in South Korean exchanges compared to foreign exchanges. The price difference may be caused by a lack of high-return investment options for investors in South Korea.
This year, between January to August, in particular, virtual currency transactions skyrocketed. In turn, currency exchanges using virtual currency also escalated. The amount of currency exchange was about 40 times higher (812.2 billion) when compared to last year (20.4 billion).
To prevent illegal transactions in the future, the country should soon come up with an executable action plan.
