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A significant number of cryptocurrency holders reside in South Korea. As the bitcoin sector becomes more mainstream, the rate of cryptocurrency acceptance in the East Asian nation has increased dramatically.
Recent research, however, suggests that some of these crypto transactions may be used for unlawful operations.
Bloomberg reported that the majority of unlawful foreign currency transactions in South Korea this year involved cryptocurrencies.
In addition, the data reveals that they have been involved in roughly three-quarters of all unlawful foreign exchange transactions so far this year.
South Korea Investigating $1 Billion Crypto-Related Cases
According to the South Korean Prosecutor’s Office, the government is now investigating four cryptocurrency-related cases involving illegal foreign-exchange transactions totaling more than $1.1 billion.
The country’s Customs Service has reported several violations of foreign-exchange transaction rules to Congressman Min Byoung Dug.
Based on the report, the amount is over double the $620 million reported for the entirety of 2021 and represents an increase of more than 70 percent from the previous year.
Image: Investopedia
The findings indicate that over 75% of transactions that violate foreign exchange regulations involve cryptocurrencies, up from 61% last year.
Along with the four illicit foreign exchange transactions, South Korea is examining cases involving $3.4 billion in anomalous transactions thought to be connected to fraudulent cryptocurrency activity.
The transactions were made feasible, according to South Korean authorities, by two large banks in the country.
South Korea: A Crypto Hub
South Korea has emerged as a crypto hub in recent years. Lately, more than 10% of the nation’s population has invested in digital currencies, when the crypto boom began in 2017.
As of August of last year, South Korea’s crypto exchanges accounted for about 10% of global transaction volume, making it one of the five largest crypto markets in the world.
In 2018, the Financial Services Commission of South Korea strengthened the rules governing crypto-exchange bank accounts.
Only “real-name bank accounts” are permitted for cryptocurrency transactions under the new set of restrictions.
According to the new laws, in order to withdraw or deposit funds from their e-wallet, a customer (trader) must have a bank account in their real name at the same bank as their cryptocurrency dealer.
Meanwhile, South Korea’s crypto sector is heavily focused on the Metaverse and NFTs. The government invested around $177 million towards the growth of the Metaverse business in the country. This made the government the first to officially take this step.
BTC total market cap at $405 billion on the daily chart | Source: TradingView.com Featured image from Wikimedia Commons, chart from TradingView.com
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