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33 individuals arrested by South Korean authorities for siphoning crypto abroad totaling $1.4B

33 individuals arrested by South Korean authorities for siphoning crypto abroad totaling $1.4B

Over the last two months, Seoul Central Customs determined thirty-three persons to have engaged in over 1.69 trillion South Korean won (or $1.48 billion) in unlawful offshore cryptocurrency transactions.

From April to September, the 33 were apprehended as part of a multi-agency operation investigating digital asset offenses such as fraud and money laundering, Korea Times reports.

Fourteen were submitted to the prosecution, fifteen were penalized, and four are still under investigation.

The Seoul customs office declared:

“Virtual asset transfers under the guise of trade, travel or study expenses are strictly prohibited <..>Violators will be subject to criminal prosecution or fines.”

Falsified documents

Over 812.2 billion won was involved in illicit foreign currency exchange. Senders paid a third party to transfer a considerable amount of funds after trading the currency on the crypto market. The individuals concerned who falsified their overseas remittance records to acquire digital currency abroad received approximately 785.1 billion won. 

The individuals spent over 95.4 billion won on cash withdrawals from overseas using Korea-issued credit cards in order to acquire cryptocurrencies there.

Korean business owner attempts evasion 

In addition, at the behest of an overseas client who sought to evade the inspection of foreign exchange regulators, the proprietor of a foreign exchange firm in Korea either transferred or hand-delivered a total of 300 billion won in 17,000 installments taken from local crypto exchange accounts.

The man in question accomplished this by utilizing his and his associates’ electronic wallets to store the cryptocurrency purchased with cash received from clients. 

Including the exchange cost, the person earned roughly 5 billion won in capital gains. He and three other people who assisted him were charged with breaching the Foreign Exchange Transaction Act.

The other lawbreakers

After earning 10 billion in capital gains from Bitcoin, a South Korean businessman was fined 12 billion Won for fabricating invoices and bills of lading to pay a paper corporation he had established to use phony billed products. The funds were distributed in 563 installments over three years.

While a university student was penalized 1.6 billion won for lying on remittance documents by claiming the funds were for studies and living expenses abroad.

Interestingly, South Korea will introduce an overseas crypto tax from 2022, targeting overseas digital assets holdings. Non-sales transfers of crypto asset ownership will be subject to statutory gift and inheritance tax rates of up to 50% starting next year, according to the government.

South Korea’s new crypto tax law comes at a time when other countries are clarifying their stance on digital assets.


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