Korean financial authorities to set new regulation on digital assets

By Lee Min-hyung | Korea Times

18 April, 2021

Financial regulators are discussing the introduction of new regulatory guidelines on overseas remittances made by investors to profit by taking advantage of bitcoin price gaps in virtual currency exchanges in Korea and other countries.

The decision came in response to growing suspicions that investors here and abroad are engaging in cryptocurrency speculation by purchasing digital currency in overseas exchanges and selling them through Korean exchanges. In Korean cryptocurrency exchanges, Bitcoin trades at around 10 percent higher than those in the U.S.

Data also showed that suspicious foreign exchange remittances have been on a steep rise this month. According to data from the nation’s top five banks ― KB, Shinhan, Hana, Woori and NongHyup ― Chinese residents here remitted $72.7 million (81.2 billion won) to their home country from April 1 to 9. This is eight times higher than the total amount remitted by Chinese residents here in March.

In response, the Financial Supervisory Service (FSS) held a virtual meeting on Friday with the heads of the foreign exchange departments of major lenders.

Both sides are known to have expressed concerns over cryptocurrency speculation and discussed ways to stop the move by introducing additional guidelines to let banks take preemptive measures against such overseas remittances.

Following the surge in overseas remittances early this month, commercial banks tightened their monitoring of such transactions, blocking retail customers from sending more than $50,000 to other countries unless they can verify the purpose of the transaction.

But as no specific legal guidelines are established here over cryptocurrency transactions, watchdogs have no choice but to keep watching suspect financial transactions and issuing guidelines to banks.

“Authorities will keep monitoring any signs of illegal trading activities in the cryptocurrency market here, and team up with global institutions to systematically deal with unlawful acts made through overseas exchanges,” a government official said.

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