South Korean Arrests 25 Illegal Kimchi Premium Traders

South Korean law enforcement continues to crack down on illegal kimchi premium traders, arresting 25 suspected traders who they believe were part of an illegal international Bitcoin (BTC) trading ring.

According to KBS and Newsis, the South Jeolla Province branch of the National Police Agency’s Security Investigation Division, the trading ring processed $72,000 in illegal transactions through South Korean cryptocurrency exchanges in 2021.

The division announced that ten of those arrested were South Koreans, nine were Vietnamese citizens, and six were Vietnamese who had obtained South Korean citizenship.

The kimchi premium is a phenomenon in which, during crypto bull markets, Bitcoin trading volumes in South Korea are higher than in the rest of the world. This surge in demand drives up BTC prices on South Korean exchanges, sometimes by 30% or more. Some traders have attempted to take advantage of this by purchasing coins from over-the-counter (OTC) traders in other parts of Asia and then dumping BTC on domestic exchanges.

This is a violation of South Korea’s strict foreign exchange laws, and traders have frequently attempted to cover their tracks by selling their BTC for fiat and transferring their funds abroad. Customs officials discovered that many traders used their profits to purchase precious metals and semiconductors.

The division stated that it was looking into possible links to OTC traders in Vietnam, and that the group was most active in April, May, and June of last year, when BTC market prices in South Korea were around 10% higher than those in Vietnam.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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