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South Korea Arrests 3 in Multibillion-Dollar Crypto-Linked Probe: Report
Authorities are investigating $3.4 billion in "abnormal transactions" involving foreign exchange and crypto investments, according to a local media outlet.
South Korean prosecutors have made the first arrests in a major investigation involving "abnormal" foreign exchange transactions and crypto investments, a local media outlet reported on Thursday.
The three people arrested were linked to a remittance platform that transferred 400 billion South Korean won (around $307 million) abroad via a multinational bank in Seoul, the report said.
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Allegations against the three include "setting up paper companies and operating a cryptocurrency trading business without registration," Bloomberg reported.
The arrests are part of a larger investigation involving two major local commercial banks Woori and Shinhan, that had transferred $3.4 billion worth of funds overseas, and possible links to "illegal crypto-related activities," Bloomberg reported in late July.
The local media report also said the accused may have tried to take advantage of the "kimchi premium," which is a discrepancy in the price of bitcoin where the cryptocurrency sells for higher rates on South Korean exchanges compared with other global trading platforms.
South Korea is cracking down on the local crypto industry following the collapse of Terraform Labs earlier this year. In July, authorities raided the house of Terra co-founder Daniel Shin, as well as the offices of seven crypto exchanges linked to the firm.
Financial regulators and lawmakers in the country are also planning to expedite the review of new crypto bills, Kim Joo-hyun, the chairman of South Korea's Financial Services Commission, said on Thursday.
Read more: South Korea's Financial Watchdog to Expedite New Crypto Rules: Report
Sandali Handagama
Sandali Handagama is CoinDesk's deputy managing editor for policy and regulations, EMEA. She is an alumna of Columbia University's graduate school of journalism and has contributed to a variety of publications including The Guardian, Bloomberg, The Nation and Popular Science. Sandali doesn't own any crypto and she tweets as @iamsandali
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Crypto Industry Asks President Trump to Stop JPMorgan’s 'Punitive Tax' on Data Access
A coalition of fintech and crypto trade groups is urging the White House to defend open banking and stop JPMorgan from charging fees to access customer data.
What to know:
- Ten major fintech and crypto trade associations have urged President Trump to stop big banks from imposing fees that could hinder innovation and competition.
- JPMorgan's plan to charge for access to consumer banking data may debank millions and threaten the adoption of stablecoins and self-custody wallets.
- The CFPB's open banking rule, which mandates free consumer access to bank data, is under threat as banks have sued to block it, and the CFPB has requested its vacatur.
