The ‘cousin Kimchi’ keeps growing. In other relevant places of the world, Bitcoin experiences a price decline, but in South Korea, a BTC is trading above USD 64,500.
South Korean financial authorities have decided to strengthen regulations applied to digital currencies amid a local surge in trading in Bitcoin and other cryptocurrencies. The South Korean government announced a new offensive against cryptocurrency transactions to take advantage of Bitcoin’s so-called “kimchi premium” between local exchanges.
The ‘kimchi premium’ is the gap in cryptocurrency prices on South Korean exchanges compared to other global sales. As a result, Bitcoin can trade up to 25% higher on South Korean exchanges.
Regulators will Fight ‘illegal’ Transactions
A report published this Monday by The Korea Times explained in detail that the Financial Supervision Service (FSS) and other national regulators chose to go on this way last Friday.
“The decision came to fruition due to a response to growing suspicions that investors, here and abroad, are engaging in cryptocurrency speculation by buying digital currency on foreign exchanges and selling it through Korean exchanges,” the outlet wrote.
For its part, a report by the local news agency Yonhap News Agency highlighted that the Financial Services Commission would intend to improve and strengthen the monitoring of “virtual money” withdrawals with the additional aid of local financial institutions.
According to the report, the strictest measures require financial institutions to monitor and detect any signs of possible money laundering and report them to the Financial Intelligence Unit (FIU). This government agency tracks illegal money flows.
South Korean regulators also plan to monitor any illegal cryptocurrency transfers out of the country closely. The new offensive is part of a broader government strategy to tackle foreign exchange remittances that may involve Chinese residents and potentially illegal activities such as tax evasion.
The Cryptocurrency Market and the Way it Eclipsed the Stock Market
The South Korean government’s strategy appeared right after the country’s commercial banks applied limits on money transfers for retail customers, requiring them to consolidate verification for cross-border transactions that surpass $ 50,000.
These strategies also come at a time of high demand for the local Bitcoin market. For the first time in history, South Korea’s cryptocurrency trading volumes have outpaced the domestic stock market activity. Cryptocurrency trading is now accelerating at an alarming rate.
As reported by various news portals, on April 15, the daily digital currency trading volume figures approached a maximum of USD 21.5 billion. The value calculation happened using CoinMarketCap data from 14 national exchanges that support switching between local fiat currency (KRW) and crypto.
Bitcoin is Trading Above $ 65,800 in South Korea
According to data from CryptoMarkets, Bitcoin is trading around $ 54,500 among the major global exchanges. However, among South Korean cryptocurrency exchanges, the top digital currency is trading $ 10,000 above.
The trading pair of Bitcoin with the local currency (Korean won) on two of the largest exchanges in the country, Bithumb, and Korbit shows that the cryptocurrency price is currently 71,803,000 South Korean won, equivalent to approximately USD 64,400.
By: Jenson Nuñez
