Financial regulators in South Korea are honing in on over-the-counter (OTC) crypto trades following an increase in scrutiny over possible involvement in criminal activities.
According to a local report published yesterday, deputy chief prosecutor Ki No-Seong and Park Min-woo of the Financial Services Commission (FSC) attended a meeting on ‘Criminal Legal Issues Related to Virtual Assets’ with a spotlight on the unregulated OTC crypto market.
The phrase ‘OTC crypto market’ refers to exchanges that are not officially recognised by the government.
Last year, it’s estimated by the Korea Customs Service that value of unlawful foreign exchange trades carried out with digital currency were worth $4billion (or 5.6 trillion won).
The report adds that the director of the Capital Markets Department suggested the need for stronger regulation of virtual currencies and pointed to OTC crypto as the “epicenter of virtual currency-related crimes”.
At the session, No-Seong called for closer inspection in the OTC crypto market and said: “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.”
A prosecution official said: “The mention of virtual currency OTC this time is a challenge to discuss and think about the types of virtual currency crimes. We plan to continue to research and think about the investigation of illegal virtual currency OTC.”
Ja-seon Ye, a lawyer at Gwangya Law Firm, said: “In order to launder virtual currency, you must go through illegal virtual currency OTC. From the perspective of investigative agencies, an environment that can actively investigate illegal virtual currency OTC must be established to accurately identify virtual currency flows. He said, “The prosecutor from the asset consolidation team must have mentioned OTC in an unusual way.”
