- Crypto-powered foreign currency smugglers moved $6.8 billion to and from South Korea.
- Korea Customs Service launches dedicated team: vows crackdown.
- Service has previously targeted kimchi premium traders.
The Korea Customs Service, the KCS, says that the vast majority of illegal foreign currency transactions it has intercepted over the past five years have involved crypto.
Over the past five years, the service has detected approximately $7.8 billion worth of foreign currency smuggling, wrote The Public. And 83% of that amount, roughly $6.8 billion, involved crypto transactions, said KCS Investigation Bureau director Kim Jeong, YonhapTV News reported.
“We will respond with a crackdown,” Kim said. “The KCS is forming a 126-member criminal fund tracking team. We will strive to eradicate illegal cross-border transactions and stop criminals from concealing their funds.”
The new team is set to investigate groups of money launderers based in Southeast Asia. Many South Korean criminal groups have relocated to nations like Cambodia, the Philippines, and Vietnam in an attempt to evade investigations.
USDT smugglers arrested
The service says a large proportion of the funds can be traced back to criminal groups such as crypto scam networks and voice phishing call centre operators.
The KCS is also keen to crack down on the practice of hwanchigi, whereby speculative forex traders use crypto and other remittance solutions to bypass banks.
Last month, police arrested five people on charges of using USDT and other stablecoins to smuggle funds worth $630 million between South Korea and Vietnam. Officers think the suspects conducted around 78,000 illegal crypto transactions.
And earlier this month, police arrested a gang of crypto traders suspected of helping a voice phishing ring launder its funds.
Investigators say they have evidence that the traders spent around $22 million buying USDT from over-the-counter vendors in Hong Kong on behalf of a criminal group.
The KCS says it plans to step up its scrutiny of domestic foreign currency exchange operators in a bid to eradicate money laundering.
Kimchi premium traders
The service said its new team would also conduct more inspections at airports and seaports.
In July, the service arrested eight people at an airport. Officers said the suspects were trying to smuggle approximately $75.3 million in gambling funds between South Korea and the Philippines, with banknotes hidden in their suitcases.
Last year, police arrested 34 people suspected of running a crypto-powered drug smuggling ring to sell crystal meth, synthetic marijuana, and ketamine via Telegram chat rooms.
In recent years, customs officials have also been cracking down on kimchi premium traders. The kimchi premium is a phenomenon that often occurs in South Korea during crypto bull markets.
Massive spikes in demand result in crypto prices on domestic trading platforms like Upbit rising above global averages.
Unscrupulous traders have attempted to make quick profits on this discrepancy by buying coins from overseas over-the-counter vendors and then dumping them on South Korean exchanges.
Crackdowns on this practice have seen customs and police officials make scores of arrests on smuggling-related charges.
Tim Alper is a news correspondent at DL News. Got a tip? Email at tdalper@dlnews.com.
