South Korean regulators look set to turn their attention to the over-the-counter (OTC) crypto market, with indications regulation could be on its way.
The nation has moved to shore up its regulatory system this year in the wake of the so-called “Terra-Luna scandal,” which left thousands of domestic LUNC investors out of pocket.
The news has also been dominated by a high-profile political scandal involving token-owning lawmakers.
Multiple (similarly high-profile) allegations of the market manipulation of so-called “kimchi coins” have also rocked the nation.
But thus far, regulation has focused on centralized crypto exchanges.
Per Asia Kyungjae, “prosecutors and financial authority officials” are now “directly mentioning” the “problems of” the OTC market.
OTC traders have been implicated with smuggling and tax evasion charges pertaining to “kimchi premium” trading.
The kimchi premium is a bull market phenomenon whereby retail BTC prices rise much faster in South Korea than elsewhere in the world.
During these periods, South Korean exchanges’ BTC prices can climb to over 30% of the global average.
In the past, this has seen South Korean traders buying Bitcoin (BTC) from OTC traders based in countries such as China.
Kimchi premium traders then swap these BTC tokens for fiat on domestic crypto exchanges.
The police and prosecution officials have clamped down hard on kimchi trading rings, unearthing associated shell companies, illegal semiconductor trading, and precious metal smugglers in the process.
But the South Korean OTC market remains largely unregulated.
An event held earlier this month at the Supreme Prosecutors’ Office indicates that law enforcers want to change that.
The event was titled “Legal Challenges in the Virtual AssetsRead more on cryptonews.com