Illegal Crypto Transactions in South Korea Tops $4.3B in 2022

The use of cryptocurrencies to perpetrate financial scams, particularly across foreign borders, has recently increased in South Korea.

A report from local media shows that residents performed transactions valued at 5.6 trillion Korean won ($4.3 billion) from unregistered foreign exchange businesses in 2022. Specifically, a total of 15 cases of illegal foreign exchange transactions involving virtual assets were discovered.

The transactions involved the purchase of foreign digital assets with the intention of selling them later in the country. The citizens used this method because the South Korean regulatory system isolates the domestic market and drives up the cost of foreign cryptocurrency for consumers.

According to customs, the total amount of money seized in connection with economic crimes climbed dramatically from $2.5 billion in 2021 to $6.2 billion last year. Interestingly, an earlier report revealed that over 75% of financial crimes and violations of South Korea’s Foreign Exchange Transactions Act last year involve the use of digital assets.

Strategies to Fight Illicit Activities

South Korea has one of the world’s highest rates of cryptocurrency adoption. This makes it an attractive target for cybercriminals who can easily target large numbers of people with a single attack.

In recent years, the South Korean government has, therefore, taken several steps to combat cryptocurrency hacks. The government recently announced that it plans to launch a crypto-monitoring system that will help in curbing money laundering. Additionally, the tracker will assist in recovering funds linked to fraudulent activities.

Furthermore, the government has tightened security requirements for cryptocurrency exchanges. In November, South Korean officials proposed new changes to the Digital Assets Bill in order to give them more control over cryptocurrency exchanges.

Remarkably, the government has formed a special task force to investigate crypto-related crimes and devise preventative measures. Accordingly, Customs officers in South Korea arrested sixteen people suspected of participating in illegal foreign exchange transactions. 

Two of the sixteen suspects were prosecuted, seven others have only been charged with negligence, and the remaining seven are still being investigated.