Prosecutors in South Korea have hit a setback in their attempt to close down kimchi premium crypto traders, as 14 individuals have been absolved of any misconduct.
Authorities have levelled allegations against 16 individuals for engaging in unlawful transactions involving a staggering $3.2 billion in assets, spanning digital currencies, traditional currencies, and physical commodities.
According to a report by Newsis, two individuals within the group were found guilty of committing minor offences. Subsequently, one of them was sentenced to serve 12 months behind bars, whereas the court imposed a six-month prison term on the other individual.
South Korean Prosecutors Seek Second Trial
In the Seoul Central District Court, a total of 14 people were declared innocent by the judges. This diverse group additionally consisted of an individual who prosecutors had strongly suspected of orchestrating the entire operation.
Prosecutors are diligently pursuing individuals involved in a case where crypto traders were allegedly engaging in the manipulation of cryptocurrency exchange prices, resulting in an estimated total of approximately $6.5 billion.
The prosecution’s case met a resolute rejection in the District Court. The court firmly expressed that the foundation of the case relied heavily on previous judgments from the Supreme Court, rather than statutory enactments.
However, the court’s ruling has left the prosecution service dissatisfied, prompting them to promptly file an appeal request.
Prosecutors harbour unwavering confidence in securing a verdict more favourable to their cause as the case advances to the High Court.
What Is the Kimchi Premium?
Bitcoin (BTC) and other alternative cryptocurrencies experience an interesting occurrence referred to as the kimchi premium. This phenomenon occurs when trading prices on South Korean exchanges significantly surpass those seen on global platforms.
The occurrence of this phenomenon is a common sight when the demand surges within the retail investment market of South Korea.
Numerous market participants have endeavoured to capitalize on this opportunity. Traditionally, they engage in purchasing cryptocurrency coins from overseas over-the-counter sellers before strategically unloading them onto local digital platforms.
Amid the 2017 surge, the premium reached its pinnacle, soaring to approximately 55%; yet as the 2020-2021 surge unfolded, it rebounded and settled near the 20% threshold.
The ethical question concerning this trading method has fostered a divisive stance within the South Korean legal circle regarding its compliance with national legislation.
The group has been alleged by prosecutors to have engaged in a multitude of trades amounting to a staggering value surpassing $3 billion from April 2021 to August 2022.
In court, the prosecution revealed that the group had cunningly masked their actions through a complex labyrinth of shell corporations and manipulated deceptive payments under the guise of legitimate business transactions.
Nonetheless, the court’s verdict reflected the challenging task of irrefutably substantiating any wrongful action on the part of the defendant.
The presiding magistrate, in addition, decreed that the fundamental matters at hand were left unaddressed by previous Supreme Court cases.
Contrary to expectations, the judge emphasized that the Supreme Court verdicts centred on the individual’s culpability and personal transgressions, rather than delving into the intricate matter of kimchi premium trading.
July 19 this year will mark the activation of an assortment of freshly minted regulations centring around cryptocurrency matters. These new rules will introduce a revised set of penalties specifically aimed at curbing offences related to manipulating the crypto market.
Frequently Asked Questions:
What was the reason behind the acquittal of 14 South Korean cryptocurrency traders from the allegations related to the ‘Kimchi Premium’?
The individuals were declared not guilty by the Seoul Central District Court, as the prosecution’s arguments were built upon past rulings of the Supreme Court instead of concrete breaches of the law.
delves into the nature of the allegations brought forth against the group of sixteen individuals.
The act of unlawfully transmitting assets, comprising digital currencies, conventional money, and goods, worth $3.2 billion, was attributed to them by South Korean authorities.
What were the consequences for the two individuals who were proven guilty in Q3?
Two individuals in the group were declared accountable for minor transgressions, leading to one of them being sentenced to spend a year in jail, while the other received a six-month prison term.
What caused the court to dismiss the prosecution’s case in Q4?
The court dismissed the case, declaring that it heavily relied on previous rulings of the Supreme Court and failed to present compelling evidence substantiating the accused’s involvement in any illicit activities concerning ‘Kimchi Premium’ trading.
Could you explain the concept of the Kimchi Premium?
South Korean exchanges tend to experience the Kimchi Premium, wherein the trading prices of Bitcoin and altcoins are typically higher compared to international platforms. This phenomenon usually arises during periods of heightened demand in the South Korean retail investment market.
By what means did the defendant supposedly take advantage of the Kimchi Premium?
According to the prosecution, the group is accused of participating in trading operations, generating trades worth more than $3 billion from April 2021 to August 2022. Allegedly, they exploited the Kimchi Premium and employed a web of fictitious businesses, manipulating trade payments to hide their actions.
What made it challenging for the court to establish the guilt of the accused?
The judge in charge concluded that establishing the defendant’s culpability beyond any reasonable doubt proved to be a difficult task, and the references to established legal principles from the highest court did not directly tackle the fundamental matters connected to the trading phenomenon known as Kimchi Premium.
What comes after in the legal course of action?
The prosecution’s discontent with the court’s decision has been vocalized, leading to the submission of an appeal plea. Consequently, the case will advance towards the High Court, raising optimism among prosecutors who anticipate a more advantageous judgment.
Are there any recent regulations introduced in South Korea concerning manipulation within the crypto market?
Starting from July 19, a series of fresh legislations focused on crypto will be enacted, specifying penalties for criminal acts associated with manipulating the crypto market.