33 investigated for illicit overseas crypto transfers

Lee Dong-hyun, director of investigation regional bureau 2 at Seoul Central Customs speaks during a press briefing at the office headquarters in Seoul, Wednesday. Courtesy of Seoul Central Customs

By Lee Kyung-min

Thirty-three people were found to have engaged in over 1.69 trillion won ($1.48 billion) worth of illicit overseas transactions involving cryptocurrency over the past two months, Seoul Central Customs said Wednesday. Fourteen were referred to the prosecution, 15 were fined and four are under investigation.

The 33 were caught in a pan-government investigation from April to September into crimes related to digital assets including fraud and money laundering.

Over 812.2 billion won concerned illegal foreign currency exchange, whereby senders of the money paid a third party to transfer a large amount of funds withdrawn after trading the currency on the crypto exchange.

About 785.1 billion won concerned people falsifying their overseas remittance records for overseas purchase of digital currencies.

Over 95.4 billion won concerned making cash withdrawals overseas with Korea-issued credit cards to buy cryptocurrencies there.

In one case, an owner of a foreign exchange business in Korea either transferred or hand-delivered a combined 300 billion won in 17,000 installments withdrawn from local crypto exchange accounts at the request of an overseas client who wanted to avoid foreign exchange authorities' scrutiny.

This was done by the individual using electronic wallets of his own and his acquaintances where he kept the cryptocurrency bought with cash he received from the clients.

The individual netted about 5 billion won in capital gains in addition to the exchange fee. He and three others who helped were referred to the prosecution for violating the Foreign Exchange Transaction Act.

In another case, an owner of a trading company in Korea was fined 12 billion won after netting 10 billion won in capital gains from bitcoin trading using 355 billion won in falsified invoices and bills of lading he sent to a paper firm he had set up overseas. The money was sent in 563 installments in a three-year period and used to buy cryptocurrency overseas.

A university student was fined 1.6 billion won after netting 2 billion won in capital gains from bitcoin trading using 40 billion won he sent from Korea to a number of accounts he had set up overseas. The student falsified remittance records by saying that the money was for study and living expenses in a foreign country.

A salaried worker and a group of people who helped the worker were fined 1.3 billion won after netting 1.5 billion won in capital gains from bitcoin trading using 32 billion won he withdrew from ATMs overseas using his credit card issued in Korea.

The Seoul customs office said the remaining four under investigation will soon be referred to the prosecution or fined.

"Virtual asset transfers under the guise of trade, travel or study expenses are strictly prohibited," he said. "Violators will be subject to criminal prosecution or fines."

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