South Korea has become a leading crypto market in the last two years, with crypto transactions rising record higher. However, the lack of crypto regulations and government oversight led to crypto-related illegal foreign transactions in South Korea. In fact, 75% of illegal foreign exchange transactions are crypto-linked as the government mulls strengthening the regulatory framework.
75% Illegal Foreign Exchange Transactions Are Crypto-Linked in South Korea
According to the South Korean government’s data, illegal foreign exchange transactions are dominated by crypto-related deals and trades, Bloomberg reported on August 25.
South Korea’s Prosecutor’s Office is currently investigating four crypto-related cases involving over $1.1 billion in illegal foreign-exchange transactions. The country’s customs office has submitted many cases with violations of foreign-exchange transaction rules to lawmaker Min Byoung Dug.
Interestingly, lawmaker Min Byoung Dug accused many crypto exchanges including Upbit of listing and delisting shitcoins for earning transaction fees.
Nearly 75% of transactions violating foreign-exchange rules and regulations are linked to cryptocurrencies. Illegal foreign exchange transactions have doubled from around $800 million in 2021 to billions this year. In fact, illicit crypto-related transactions have jumped 61% from last year.
Unfortunately, the last two years of rising cryptocurrency adoption in South Korea made illegal foreign exchange transactions jump 70 times from 2020.
The four illegal foreign exchange cases are separate from the ongoing probe into illegal cryptocurrency-related activities by banks. South Korea’s Financial Supervisory Service is investigating banks including Woori Bank and Shinhan Bank for $3.4 billion in crypto-linked foreign-exchange transactions.
Probe Against TerraForm Labs and Do Kwon
The South Korean prosecutor’s office is also investigating TerraForm Labs, Do Kwon, and related parties for the Terra-LUNA crisis. Allegations of fraud, money laundering, and tax evasion are under investigation by the authorities.
The Terra-LUNA crisis in May duped nearly $40 billion in losses for investors globally. The authorities have summoned Terra’s executives and affiliates for court proceedings. Terra’s founder Do Kwon has finally hired lawyers in South Korea after four months of hiding in Singapore.