Bitcoin latest: South Korea detects $600m of illegal cryptocurrency trading as it steps up regulation

The country this week introduced new rules designed stop digital currencies being used for money laundering

Broken representation of the Bitcoin virtual currency, placed on a monitor that displays stock graph and binary codes, are seen in this illustration picture, December 21, 2017 (Reuters)

South Korea has detected hundreds of millions of dollars worth of illegal cryptocurrency trading, shortly after imposing new regulation.

The country’s customs service says that around 637.5bn KRW ($598.6m, £423.2m) worth of foreign exchange crimes have been uncovered.

It isn’t yet clear how the people involved in the rule breaches will be punished, but authorities will continue to monitor for any violations of foreign exchange rules or of money laundering activities.

The findings are a sign that authorities are tightening the regulatory screws on the digital asset that many global policymakers consider to be opaque and risky.

“Customs service have been closely looking at illegal foreign exchange trading using cryptocurrency as part of the government’s task force,” South Korea’s customs service said, underscoring stepped-up efforts by Seoul to crack down on illegal trade in the digital asset.

Illegal foreign currency trading of 472.3 billion KRW formed the bulk of the cryptocurrency crimes, it added.

However, the customs service gave no details on what action authorities were planning to take against the rule breaches.

Effective from 30 January, only real-name bank accounts are allowed to be used for cryptocurrency trading.

The rule is designed to stop bitcoin and other digital currencies from being used for money laundering and other crimes.

Among other breaches, customs said there were also cases where investors in Japan sent their yen worth 53.7 billion won to their partners in South Korea for illegal currency trade.

Contrary to numerous hints that were dropped over recent weeks, South Korea is not planning to ban cryptocurrency trading, the country’s finance minister has said.

The government will instead focus on regulating exchanges.

Additional reporting by Reuters

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