A South Korean financial regulator is prepared to go on the hunt for kimchi premium dealers and has vowed to prosecute anyone found guilty.
several shrewd traders have attempted to gain from the kimchi Premium By purchasing BTC from international over-the-counter (OTC) traders overseas and afterward “dumping” the coins for a profit on South Korean platforms like Upbit.
The kimchi premium is an occurrence in the cryptocurrency trading markets where bitcoin (BTC) and other cryptocurrencies trade at much higher prices on domestic exchanges than on global trading networks. This frequently results from increases in demand among South Korean retail investors.
To achieve this, dealers must purchase coins overseas; they have mostly looked for OTC sellers in China and Japan. Banks have been instructed to put limits on international remittances to stop this trend.
However, some traders seem to have evaded detection. According to The Segye Ilbo, the financial oversight agency Financial Supervisory Service (FSS) is looking into two transactions that are allegedly made by traders of kimchi premium.
The first transaction included the domestic bank Shinhan and had a stunning value of USD 987 million. The second took place at Woori Bank and was worth about USD 608,000.
The transactions were detected as questionable by both banks, who then reported them to the FSS. Although no precise time frame was provided, it is thought that these transactions may have occurred around the height of the kimchi premium, around two or three years ago, when BTC was about 30% more expensive in South Korea than the global average.
The FSS thinks the traders may have attempted to hide their behavior by moving their earnings overseas. They seem to have conveyed a message to confuse regulators, by sending fiat to japan and china holding accounts.
The dealers also seem to have made additional efforts to hide their behavior by acting as middlemen for a variety of firms. The banks were allegedly informed that they were “paying for foreign items such as gold bars.”
Following several “on-site inspections” as part of its inquiry, the FSS forwarded both cases to the prosecution department.
Additionally, prosecutors are looking into instances that the Financial Intelligence Unit, the authority that directly oversees cryptocurrency exchanges, referred to them earlier this year. Investigators located in Daegu, a city in the country’s south, first looked into the incidents.
Source: https://www.cryptopolitan.com/south-korean-regulators-after-kimchi-traders/