South Korean regulators are turning their attention to the over-the-counter (OTC) crypto market, hinting at potential regulation in the future. This comes after the country strengthened its regulatory system due to the “Terra-Luna scandal” and political scandals involving token-owning lawmakers.
Previous regulations focused on centralized crypto exchanges, but now prosecutors and financial authority officials are addressing issues related to the OTC market. OTC traders have been involved in smuggling and tax evasion charges linked to the trading of “kimchi coins.” The South Korean OTC market remains largely unregulated, but recent events suggest that law enforcers are determined to change this. They claim that OTC markets have become a hub for virtual currency-related crimes like fraud and money laundering.
Attendees of an event organized by the Supreme Prosecutors’ Office called for stronger regulations and emphasized the importance of regulating OTC companies involved in illegal activities. It is estimated that these OTC marketplaces offer trading services for over 700 coins. Experts expect stricter regulations to be imposed in the future to combat market manipulation and money laundering.