South Korea uncovers $600 million in cryptocurrency crimes

SEOUL: South Korea has uncovered illegal cryptocurrency foreign exchange trading worth nearly $600 million, a sign authorities are tightening the regulatory screws on the digital asset that many global policymakers consider to be opaque and risky.

The country’s customs service said in a statement on Wednesday that about 637.5 billion won ($596.02 million) worth of foreign exchange crimes were detected.

“Customs service have been closely looking at illegal foreign exchange trading using cryptocurrency as part of the government’s task force,” it said, underscoring stepped-up efforts by Seoul to crack down on illegal trade in the digital asset.

Illegal foreign currency trading of 472.3 billion formed the bulk of the cryptocurrency crimes, Customs said, but gave no details on what action authorities were taking against the rule breaches.

South Korea has adopted a tough stance on regulating cryptocurrency trading as many locals, including students and housewives, jumped into a frenzied market despite warnings from policy makers around the world of a bubble.

Effective from Jan. 30, authorities will allow only real-name bank accounts to be used for cryptocurrency trading designed to stop virtual coins from being used for money laundering and other crimes.

Among other breaches, Customs said there were also cases where investors in Japan sent their yen worth 53.7 billion won to their partners in South Korea for illegal currency trade.

It said authorities will continue to monitor for any violations of foreign exchange rules or of money laundering activities.

Seoul previously said that it is considering shutting down local cryptocurrency exchanges, which threw the market into turmoil and hammered bitcoin prices. Officials later clarified that an outright ban is only one of the steps being considered, and a final decision was yet to be made.

Reuters adds: Bitcoin stood at $9,800.00 as of 0502 GMT on the Luxembourg-based Bitstamp exchange. The heightened regulatory scrutiny around the world, however, has seen bitcoin dive about 31 percent so far this month, on track for its biggest monthly decline since December 2013.

Cryptocurrencies got another jolt last week after Tokyo-based exchange Coincheck said hackers stole over $500 million in one of the world’s biggest cyber heists.