South Korea is one of the biggest crypto markets in Asia. The country is home to some of the leading global digital exchanges. But, with growing adoption, the country is facing the issue of illegal crypto-mediated foreign currency transfers.
According to a report published by Korea Herald, Song Jae-ho of the Democratic Party of Korea (DPK) said that Korea registered more than $676 million worth of unregulated crypto-related foreign currency transfers during the first 8 months of 2021. Song added that the data submitted by the Korea Customs Service (KCS) for the National Assembly Finance Committee’s audit of the customs agency showed record growth in suspicious crypto-mediated FX transfers.
Since the start of 2021, Korea has introduced strict measures against illegal crypto transactions in the country. Korea announced a crackdown against illegal crypto exchanges in the region, but despite all the efforts, unregulated foreign currency transfers involving digital currencies are on the rise.
“We are aware of the growing need for deeper discussions on ways for the virtual asset market regulation to enhance consumer protection regardless of the volume of their investments. Virtual assets are highly volatile, the reason why the investment craze is sustained for years,” Song said.
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In the latest announcement, the Korean lawmaker highlighted the risks associated with volatility in the crypto market. “The fluctuations in value have also led speculative forces to thrive in a short period of time. The volatility widening due to corporate value tied to that of virtual assets necessitates legislative push for greater user protection in the virtual asset market,” Song added.
Korean authorities believe that the illegal crypto-related FX transfers have been used for tax evasion and gambling. According to the local laws, unregulated foreign currency transfers are subject to scrutiny under the Anti-Money Laundering Act.
According to a recent study conducted by the Korea Social Opinion Research Institute (KSOI), most South Koreans want the government to tax crypto assets.