South Korea

South Korea Customs Services Uncovers Nearly $600 Million in Crypto Crimes

South Korea Customs Service Uncovers Crypto-Related Crimes

South Korea Customs Service (KCS) claims that it has tracked down cryptocurrency crimes related to crypto foreign exchange trading worth almost $600 million. According to KCS, these findings stem from a larger nation-wide investigation of its crypto-market. Notably, these crimes have been uncovered just a few days after Korean regulators banned anonymous cryptocurrency accounts, effective January 30th.

Although the organizations or individuals allegedly involved in illegal crypto-related currency exchange have not been publicly identified, KCS did reveal typical methods used to orchestrate this crimes. For example, in one particular incident, illegal foreign currency trading amounted to 472.3 billion WON and is said to have been carried out via unregistered exchanges that remitted payments from South Korea to Australia, between March and December 2017.

Money Laundering & Illegal Trading

Other reports indicate that local investors purchased around 1.7 billion WON ($1.59 million) in crypto through an FX agency, and sent it abroad to various companies using online wallets. Transferred funds were reportedly converted to fiat currencies, resulting in undocumented capital flows. In other notable cases, KCS states that Japanese traders engaged in illegal currency trading by sending around 53.7 billion WON worth of Japanese yen (JPY) to a number of South Korean citizens.

South Korean law requires that only banks, brokers, or financial institutions with proper licenses may facilitate foreign exchange transfers. Furthermore, if individuals or domestic companies want to transfer amounts exceeding $3000, they must inform the country’s tax department, and specify why they want to transfer the money.

The customs office of South Korea stated that it had been working to track down money laundering and illicit trading. However, the office did not mention what it had been doing to stop these illegal activities. Meanwhile, regulatory authorities around the world have expressed concerns that cryptocurrency-related companies can prove risky to use and often lack transparency.

Cryptocurrency Market is Suffering

This has been a rather uneventful week for the cryptocurrency market. As reported earlier by Core Media, Coincheck, a popular Japanese crypto-exchange was hacked. Approximately $534 million worth of NEM tokens were stolen due to the hack. Although this incident alone might not have contributed to bringing down the crypto-market, it must have had some impact. Moreover, bitcoin is down over 27% since the new year began (CoinMarketCap). Bitcoin’s value has not dropped as much during a 1 month period since January 2015. More than likely, the primary reason for this drop is due to regulators worldwide cracking down on their country’s crypto-related businesses and trading.

Cryptocurrencies and their underlying technology, particularly blockchain, have the potential to be used in so many constructive ways. Unfortunately, certain individuals and organizations are using them for all sorts of illegal purposes. If this abuse continues, the crypto-market might not survive, which could be a great loss for humanity.