South Korea to Make Illegal FX Task Force Permanent, Strengthen Crypto-Linked Probes

South Korea will step up its crackdown on illegal foreign-exchange transactions involving cryptocurrencies and other assets.

The Ministry of Economy and Finance said June 10 that it held a meeting of the pan-government task force on illegal foreign-exchange transactions at the government complex in Sejong to review ongoing investigations and discuss future response plans. Attendees included the ministry, the National Tax Service, the Korea Customs Service, the Financial Supervisory Service, the Bank of Korea and the National Intelligence Service.

The Korea Customs Service has been inspecting illegal foreign-exchange transactions since January, focusing on companies with large trade and foreign-exchange volumes over the past five years. The review centers on firms with large gaps between reported import and export amounts and the trade payments actually made or received.

The National Intelligence Service recently uncovered a company that disguised client funds as trade payments, moved the money overseas, bought cryptocurrencies there and brought the assets back into South Korea to convert them into cash.

The government plans to expand its investigations into illegal foreign-exchange transactions. It will also convert the task force into a permanent body after initially planning to operate it temporarily through the first half of this year.

A ministry official said the permanent task force would help authorities intensify efforts to block illegal foreign-exchange transactions that undermine stability in the foreign-exchange market.