The South Korean Custom Services has recently reported a sharp spike in the number of illegal crypto-related transactions detected in the country within the past eight months.
In the report, the Korea Customs Service noted that it has seized digital currencies worth a whopping $750 million in several illegal crypto-related transactions between January and August 2021.
This figure is reportedly 40 times higher than the number of cryptos seized around the same period last year.
The ‘Kimchi Premium’ Fuels the Surge
The tax organization revealed that it had experienced a significant decline in the number of illegal crypto-related transactions conducted last year due to the COVID-19 outbreak.
Representative Yang Kyung-sook of the National Assembly Planning and Finance Committee noted,
“Last year, illegal foreign exchange transactions also decreased due to the reduction of foreign exchange transactions and trade volume due to [COVID-19], but it is on the rise again this year. We need to come up with an effective response plan.”
As per the report, the figures appear to have skyrocketed due to the influence of the “Kimchi Premium”, a situation where bitcoins are traded at higher prices in Korea.
During the massive cryptocurrency surge between January and August of this year, the number of currency exchanges operating in South Korea exploded, with thousands of them conducting illegal transactions.
The revenue these illegal currency exchanges had amassed from crypto transactions amounted to 885.6 billion won (approximately $750 million), which, according to the Korea Customs Service, is subject to fines.
The South Korean government had earlier decided to implement a decree that will see crypto holders and businesses pay a 20% tax on crypto gains.
However, to gather the support of crypto enthusiasts in the upcoming presidential election, the country’s ruling party decided to delay the implementation of the crypto tax bill.