South Korean Regulators Eyeing OTC Crypto Market for Regulation
South Korean regulators are turning their attention to the over-the-counter (OTC) crypto market, indicating that regulation may be on the horizon. This comes as the nation aims to strengthen its regulatory system following recent scandals and allegations of market manipulation.
While previous regulations focused on centralized crypto exchanges, authorities are now highlighting the issues within the OTC market. OTC traders have been implicated in smuggling and tax evasion charges related to “kimchi premium” trading.
The kimchi premium refers to a bull market phenomenon in which retail Bitcoin prices rise significantly faster in South Korea than elsewhere in the world. During these periods, South Korean exchanges experience BTC prices that can reach over 30% of the global average.
Law enforcement officials have already cracked down on kimchi trading rings, but the South Korean OTC market remains largely unregulated.
OTC Crypto Traders Under Scrutiny
An event titled “Legal Challenges in the Virtual Assets Field” held at the Supreme Prosecutors’ Office indicates that law enforcers are determined to change this lack of regulation. Representatives from various agencies attended the event and emphasized the need for stronger crypto regulation.
OTC markets were described as “the epicenter of virtual currency-related crimes,” including fraud and money laundering. Deputy Chief Prosecutor Ki No-seong called for regulation of OTC companies engaged in illegal activities.
The attendees referred to the OTC market as a high-value investor-dominated sector, with some platforms offering trading services for over 700 coins. Professor Hong Ki-hoon predicted stricter regulations against market manipulation and money laundering.
Closing Thoughts: The Future of OTC Crypto Trading in South Korea
South Korean regulators are setting their sights on the OTC crypto market, aiming to address the lack of regulation in this sector. The focus is on combating illegal activities such as smuggling, tax evasion, fraud, and money laundering.
With law enforcement officials and financial authorities expressing the need for stronger regulations, it is likely that the OTC market will face increased scrutiny and oversight in the future. Investors and traders should be prepared for potential changes that may impact their activities in South Korea’s cryptocurrency landscape.
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