Crypto Crackdown: South Korea Targets OTC Market Amid Multi-Billion Scandals

• South Korea is increasing regulatory scrutiny on the over-the-counter (OTC) crypto trading market due to a surge in illicit activities.
• Financial regulators are concerned about possible money laundering and other illegal activities in the unregulated OTC crypto sector.
• OTC crypto entities, often operating from foreign territories, facilitate unauthorized conversion of virtual currencies into the Korean won or other global currencies.
• These entities function without official registration and operate outside established trading business norms in South Korea.
• OTC platforms, including peer-to-peer exchanges, allow users to transact beyond the purview of established regulatory platforms.
• Cases of illicit transactions via OTC platforms have been reported, with significant amounts of digital currency being acquired and liquidated into cash within Korean borders.
• The Korea Customs Service estimates that unlawful foreign exchange transactions via digital currency amounted to $4 billion in 2022, with a significant increase from the previous year.
• Nearly 70% of the illicit financial activity tracked by officials involved crypto transactions.

The article highlights the concerns and urgency of South Korea's financial regulators in addressing the surge in illicit activities associated with the unregulated OTC crypto trading market. The sentiment is negative as the focus is on the potential dangers and risks posed by these activities.