‘$3.2bn’ Kimchi Premium Traders to Stand Trial in South Korea

19 Jan 2023 04:00 AM

By Tim Alper | @tim-alper

South Korean prosecutors are continuing to wage war against illegal kimchi premium traders – and will seek to convict 20 people for allegedly conducting $3.2 billion worth of illegal crypto transactions.

The kimchi premium is a phenomenon whereby increased trading volumes on South Korean crypto exchanges drive prices above the global average.

Some South Korean traders have attempted to exploit this by buying tokens like bitcoin (BTC) from overseas over-the-counter vendors via wire transfers. They then dump the coins on domestic crypto exchanges for a hefty profit.

During recent bull runs years, domestic retail investors’ trading volumes have tended to rocket upwards extremely rapidly. In some cases, this has led to sudden discrepancies of up to 50% between domestic prices and overseas averages.

Current kimchi premium levels stand at under 1%. (Source: Cryprice.com)

But prosecutors have grown wise to this tactic – and last year began clamping down on what they believe are vast networks of such traders. Officers think that these networks stretch across national borders and make use of shell companies, created in a bid to throw investigators off the investigative trail.

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