January has been a critical month for the crypto world with numerous regulations, bans and hacking incidents happening all over the globe. Much of the news that moved the market was from Asia and the United States. The two account for the top two positions in market capitalization and trade volumes, with the United States taking the lead followed by Japan and finally South Korea. However, South Korea was the major market mover with regulations and crypto-ban confusion.
Today, the South Korean Customs Service announced that it had uncovered cryptocurrency crimes valued at over $596 million; the figure includes illegal foreign exchange trading which amounts to 472.3 billion won. The authorities did not disclose the possible actions to be taken on such violations during the press release.
The Customs went further to give an example of an illegal FX agency which collected over 1.7 billion won ($1.59 million) from locals in form of crypto coins and sent to a partner abroad. The partner later cashed out the coins and used the cash for settlement of clients-dealings. The Customs Service gave another case of a Japanese Investors sent over 53.7 billion won to partners in South Korea for illegal Forex trading.
South Korea has one of the toughest laws in cross-border transactions limiting foreign exchange services to only licensed banks and brokers. People and companies are required to provide purpose, source, and beneficiary of the funds together with their tax documents in order to send more than $3,000 out of the country. These measures help to reduce cases of money laundering and tax evasion. Organizations that move over $50,000 annually are also required to report and produce similar documents.
The news comes as the country’s abolishment of anonymous trading deadline lapsed yesterday. The law requires traders to have their crypto exchange names and details match the details in their bank accounts. The regulation is similar to Know Your Customer (KYC) compliance in the United States.
The news caused a further fall in crypto prices as the market recently was affected by the Tokyo-based exchange Coincheck NEM coins hack. The hack was labeled one of the world’s biggest cyber heists as hackers stole over $500 million.
The authorities further stated that they will be monitoring the market for any FOREX violations and other illegal financial activities in the country. This comes as policymakers globally remain critical of cryptocurrency existence.
