South Korean regulators are shifting their attention to over-the-counter (OTC) crypto trades as concerns about their use for criminal activities continue to grow. The country’s financial regulators are reportedly closely monitoring trading in the OTC crypto market.
According to a report published in a local daily, deputy chief prosecutor Ki No-Seong and Park Min-woo of the Financial Services Commission (FSC), along with other important regulatory officials, recently attended a session on “Criminal Legal Issues Related to Virtual Assets.” The focus of the session was on the unregulated OTC crypto market. During the event, No-Seong emphasized the need for regulation in the OTC crypto market due to concerns about money laundering.
“Illegal virtual currency OTC companies have overseas corporations and are engaged in the business of converting illegally obtained virtual currency into Korean won or foreign currency. There is a need to regulate these companies as undeclared virtual asset trading businesses,” No-Seong stated.
The term “OTC crypto market” refers to exchanges that are not officially recognized by the government. It includes all transactions involving digital currencies that occur outside of regulated platforms, such as peer-to-peer (P2P) exchanges. Upbit, the largest regulated crypto platform in South Korea, offers a total of 172 cryptocurrencies, while OTC platforms provide access to up to 700 cryptocurrencies, according to the report.
The report also highlighted several instances where OTC platforms were used to convert digital assets into Korean won. The International Crimes Investigation Department of the Incheon District Prosecutors’ Office arrested and indicted three individuals for engaging in illegal foreign exchange transactions between October 2021 and October 2022.
The arrested individuals were found to have purchased $70.9 million (94 billion won) worth of digital currency from overseas OTCs at the request of Libyans and then converted it into cash in Korea, as per the report. The Korea Customs Service estimated that the value of unlawful foreign exchange transactions made using digital currency was $4 billion (5.6 trillion won) last year.
Over the years, South Korea has gained a reputation for its strict crypto regulations and has implemented several measures to combat crypto-related crimes. The country’s regulators have become more proactive in response to the collapse of Terra.
[Source: Asiae.co.kr](https://cm.asiae.co.kr/article/2023091507274557430?aceRef=https%3A%2F%2Fcryptonews.com%2F)
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