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Authorities vow to crack down on illegal crypto transactions

April 19, 2021 - 15:44 By Kim Young-won
Digital screens in Seoul show the price of a bitcoin above 70 million won ($62,600) on March 14. (Yonhap)

The South Korean government said Monday that it will tighten up regulations to trace illegal cryptocurrency transactions and cases of fraud amid growing concerns over a speculative bubble in the virtual coin market.

The announcement was made after a meeting among top government officials and economy-related ministers on Friday to discuss issues related to the highly volatile cryptocurrency market and alleged crypto crimes.

As part of the government’s efforts, the state watchdog Financial Services Commission has asked financial firms to carry out enhanced monitoring schemes to look into if there are any money laundering cases utilizing digital coins.

Under the toughened regulations, Korea financial firms will have to report alleged illegal transactions to the state-run Korea Financial Intelligence Unit within three days after they find suspicious financial crimes. Upon receiving the report, the KoFIU will conduct joint investigations with the police and tax authority in a swift manner, said the Office for Government Policy Coordination, which led Friday’s meeting.

The Korea Fair Trade Commission, the nation’s antitrust regulator, will look into if local cryptocurrency exchanges have adopted contract terms deemed unfair to individual customers while the Ministry of Economy and Finance will examine if there are illegal money remittance cases via crypto assets.

“Individuals should make careful decisions related to cryptocurrencies as crypto assets, which have no intrinsic value, are means of speculation rather than investment,” said Gu Yoon-cheol, chief of the Office for Government Policy Coordination.

Meanwhile, the combined value of altcoins, referring to cryptocurrencies other than Bitcoin, increased more than five times this year, according to data on Monday.

Upbit Altcoin Index, or UBAI, an index that shows the movements of altcoins in the market, once surpassed 9,000 on Saturday for the first time since related data has been recorded by local crypto exchange Upbit starting in 2017. The index, which remained at a level of 8,500 on Monday, was 1,707.52 on Dec. 31.

Among the altcoins, Ethereum, which has a 41.35 percent weight in the index, has seen its value soar 280 percent this year.

According to local crypto exchange Bithumb, its own altcoin index shows the entire value of altcoins jumped 4.69 times, as the index increased from 899 on Dec. 31 to 4,218 on Friday.

By Kim Young-won (