South Korea’s four largest crypto exchanges are doing well after two of them received operating licenses from the financial regulator and data revealed they are now inundated with customer deposits. Bank commissions are also booming, leaving the “oligopoly” of four loans to rule unquestionably over the country’s crypto industry. But customs officials say they have detected dozens of incidents of illegal premium kimchi traders performing “illegal transactions.”
Upbit, the market leader, and Korbit, the country’s leading trading platform appears to have received its permits within hours of each other, according to reports from iNews24 and Chosun. Bithumb and Coinone, the two remaining members hope that their own licenses will be approved soon. The Group of Four was the only trading platform to enter into the key banking partnerships that allow them to offer true, individual, approved banking services to customers. Without banking agreements, exchanges were told that they would not be allowed to offer KRW fiat pairs as of the 24th of last month.
Meanwhile, Kyunghyang Shinmun reported that the data compiled by the Financial monitoring service and submitted to Congressman Yoon Chang-hyeon, a member of the National Assembly’s Political Affairs Committee, shows that deposits using nominal accounts in the four major exchanges reached a cumulative total of $ 7.75 billion. This figure represents a staggering 1,368% increase from June of last year, when similar figures were last compiled.
In addition, the number of verified real-name accounts at partner banks has increased by 777% since last year, with more than 7.3 million such accounts now open.
Banks have also benefited from the success, according to the figures. As the number of transactions increased, so did the fees paid by the exchange’s customers.
During the second quarter of the current fiscal year alone, K-Bank (which Upbit partners), Nonghyup Bank (Bithumb and Coinone bank), and Shinhan Bank (which Korbit partners) received a combined total of $ 14.2 million in trading commissions. This figure represents an increase of 3.139% in the third quarter of fiscal 2020, the media noted.
However, regulators and customs officials have been looking for signs of criminal activity among the Big Four and clients of other trading platforms, and this week said they have identified dozens of illegal transactions.
By SBS, the Korea Customs Service said it detected illegal transactions abroad using cryptoassets worth US $ 684 million between January and August 2021, an increase of 40 from 2020 figures. It is believed that much of this figure is the work of kimchi bounty opportunists – who moved fiat overseas to make crypto purchases at lower prices before ‘throwing’ coins on national exchanges, where they were sold up to 8-10% more. .
According to data from Skolkg.com, the kimchi premium is making a very gradual return as prices rise, with tokens trading around 2% higher than on international platforms.
South Korean law specifies that all overseas transactions over $ 5,000 must be reported to a customs office. But those looking to make a quick buck transferring funds overseas have increasingly sought to bypass and confuse customs officials using crypto, working on foreign platforms where possible. .
In 2017, however, only one crypto-related illegal money transfer was recorded, worth around $ 82,000.
But now that the “big four” seem to move with great haste under the regulatory wing of the Financial Services Commission and his Financial Intelligence Unit agency, these opportunists are on the verge of being hammered with the full force of South Korean law: the big four have duly handed over their clients’ business files, now using exclusively accounts without anonymity, to tax and customs auditors – triggering repressive measures, symbolic seizures, even forced liquidations.
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