Suspicious Crypto Transactions in South Korea Soar 49% in 2023

The growth of crypto assets related to illegal activities in South Korea has soared. (Photo; Doc. Blockchain News)

JAKARTA - The crypto market in South Korea will experience rapid growth throughout 2023, along with the recovery in prices of Bitcoin and other digital assets. However, behind this increase, there is also an increase in activities that have the potential to violate the law and harm society.

According to data from the Financial Intelligence Unit (FIU), an institution under the Financial Services Commission (FSC), there were 16,076 reports of crypto transactions suspected of being related to crimes such as money laundering, market manipulation, drug trafficking, etc. in 2023. The number This is up 49% compared to 2022, which was only 10,797 reports.

The FIU stated that the increase in the number of reports was due to better cooperation with crypto service providers in South Korea, which are required to report suspicious transactions to the FIU in accordance with the Certain Financial Information Act. However, FIU did not provide further details regarding the source, type and impact of these reports.

From the reports received by the FIU, as many as 100 cases have been submitted to the National Tax Service and National Police Agency for follow-up. These cases involve unregistered crypto lending companies, which are suspected of fraud, embezzlement and tax evasion. FIU collected suspicious transaction data from December 2023 to January 2024 to identify these cases.

To prevent and address suspicious crypto transactions, FIU plans to implement a new system that can stop transactions before they are investigated by prosecutors. This system will undergo initial testing in March 2024, and is expected to increase effectiveness and efficiency in law enforcement.

Crypto Regulations Are Getting Tighter

This FIU report shows that South Korea is getting serious about supervising and regulating the crypto market in its country, which is one of the largest crypto markets in the world. In 2023, South Korea experienced several incidents that rocked the crypto industry, such as exchange hacks, fraud, and raids.

In response, the South Korean government issued various new rules and policies to increase transparency and accountability in the crypto sector. One of them is the obligation for senior public officials to report their digital asset holdings, which was announced by the Ministry of Personnel Management in January 2024.

Additionally, the Korean Customs Office also revealed that approximately 88% of illegal foreign exchange trading crimes in 2023 involved digital assets, which are used to smuggle illegal goods or evade taxes. To overcome this, customs authorities have formed a special team tasked with fighting crypto-related crimes.

With increasingly stringent regulations and supervision, it is hoped that the crypto market in South Korea can run more safely, fairly and responsibly. This can also increase public trust and participation in the crypto industry, which has great potential to develop and provide benefits to the economy.