Court Acquits Group Accused of Exploiting ‘Kimchi Premium’ in Cryptocurrency Transaction

A group accused of illegally transferring $4.2 million in foreign currency to exploit the price difference between domestic and overseas cryptocurrency exchanges has been acquitted. The Seoul Central District Court’s Criminal Division 5 acquitted 14 individuals, including the main defendant, of charges related to violating the Foreign Exchange Transaction Act. The group allegedly collected funds from 256 individuals and transferred $4.2 billion overseas through nine banks. They used a paper company as a front to facilitate the transfers and bought cryptocurrencies abroad to sell at a premium on South Korean exchanges. Despite prosecution claims of violating exchange laws and financial regulations, the court ruled that the defendants’ actions didn’t constitute foreign exchange business as defined by the law. Additionally, the court found that the bank’s failure to properly scrutinize transfer requests absolved the defendants of interfering with foreign exchange transactions. Charges related to failing to report virtual asset trading under the Specific Financial Information Act were also dismissed, as the court determined the defendants were not engaged in a virtual asset business but rather large-scale trading on exchanges.

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