South Korean law enforcement has launched an investigation into a possible violation of currency exchange rules for bitcoin, called the “kimchi premium”. Reported by Yonhap.
The process is part of a broader investigation by the country’s Financial Supervisory Service (FSS). According to the press, the organizer handed over the materials to the Supreme Prosecutor’s Office.
“We only check data,” a representative of the supervisory authority told the publication.
The documents also include a report on the audit of companies that transfer money abroad. The list allegedly includes the country’s largest banks, Woori Bank and Shinhan Bank.
According to the FSS, companies received a “kimchi premium” when bitcoin was sold at a higher-than-market price in South Korea. As foreign citizens are prohibited from opening accounts on local crypto exchanges, arbitrators cannot take advantage of the current inconsistency.
The funds received went abroad. According to the publication, a significant part of the transfers came to China. In total, we’re talking more than 2 trillion won ($1.5 billion).
Bitcoin is currently trading around $21,350 on Binance and $21,325 on Coinbase.
On the South Korean platform Upbit, the price of the first cryptocurrency is held at 28.4 million won ($21,647). Thus, the “kimchi premium” was reduced to about 1.5%.
On April 5, 2021, the price of the first cryptocurrency on South Korean exchanges reached $ 66,500 in local currency. “Kimchi premium” exceeded 15%.
In October, South Korean authorities recorded an increase in illegal foreign exchange transactions using digital assets. Presumably, the “kimchi premium” influenced this.
Recall that in July, the country’s government postponed the introduction of taxes on bitcoin traders until January 1, 2025.
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Source: Fork Log
I’m Sandra Torres, a passionate journalist and content creator. My specialty lies in covering the latest gadgets, trends and tech news for Div Bracket. With over 5 years of experience as a professional writer, I have built up an impressive portfolio of published works that showcase my expertise in this field.