South Korean regulators have turned their attention to over-the-counter (OTC) trading of cryptocurrencies amid growing concerns about their use for criminal activities. The country’s financial regulators are apparently monitoring operations in the over-the-counter cryptocurrency market.
According to a report published in a local newspaper, Deputy Chief Prosecutor Ki No-Seong and Park Min-woo of the Financial Services Commission (FSC) and other vital regulatory officials attended a session on “Criminal Legal Issues Related to Virtual Assets” focused on the unregulated over-the-counter market of cryptocurrencies. During the event, No-Seong called for the over-the-counter cryptocurrency market to be regulated due to concerns about money laundering.
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A Google translated version of Seong’s statement read:
“Illegal over-the-counter virtual currency companies have overseas corporations and engage in the business of converting illegally obtained virtual currencies into Korean won or foreign currencies. “These companies need to be regulated as undeclared virtual asset trading businesses.”
The term “over-the-counter cryptocurrency market” describes exchanges that are not officially recognized by the government. Over-the-counter digital currency transactions include all transactions outside of regulated platforms, including peer-to-peer (P2P) exchanges. According to the report, There are a total of 172 cryptocurrencies available on Upbit, South Korea’s largest regulated cryptocurrency platform, while over-the-counter platforms offer up to 700 cryptocurrencies.
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The report cited several cases of using over-the-counter platforms to convert digital assets into Korean won. The International Crime Investigation Department of the Incheon District Prosecutor’s Office detained and charged three people with engaging in illegal currency transactions between October 2021 and October 2022.
According to the report, the arrested trio were found to purchase US$70.9 million (94 billion won) worth of digital currencies overseas OTC at the request of Libyans and then send them to Korea to be converted into cash. The Korea Customs Service estimated that the value of illegal foreign exchange transactions carried out with digital currencies amounted to US$4 billion (5.6 trillion won) last year.
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Over the years, South Korea has become known for its strict cryptocurrency regulations and has several regulations in place to deal with cryptocurrency-related crimes. The country’s regulators have become more proactive following Terra’s collapse.
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