Crypto Quill

November 25, 2024, 08:31 AM IST – South Korea’s Financial Services Commission (FSC) has announced that it will intensify its scrutiny of the cryptocurrency market to prevent unfair transactions amid rising volatility. The statement, made by FSC Chairman Kim Byoung-hwan on Sunday, comes at a time when the value of virtual assets is surging, causing concern among regulators about the stability and integrity of the market.

Increased Monitoring Due to Volatility

Kim emphasized that the recent surge in cryptocurrency prices, coupled with significant market fluctuations, requires enhanced monitoring to ensure fair practices. He noted that these developments have led to an urgent need for governmental oversight.

“The price of virtual assets has recently been shooting up in a very short period of time, and with the heavy volatility of the market itself, the government needs to closely monitor possible unfair transactions,” said Kim in an interview with public broadcaster KBS.

The government’s primary objective is to connect the virtual asset market to the traditional financial system, while simultaneously ensuring the protection of investors within this high-risk space.

Crypto Trading Surpasses Stock Market Transactions

According to reports from Yonhap News, the total value of cryptocurrency transactions in South Korea recently exceeded that of transactions in the country’s stock market. This marks a significant shift, highlighting the growing influence and size of the virtual asset market in the region.

In light of this trend, South Korean regulators are focusing on creating a framework that will facilitate the integration of digital assets into the broader financial system, ensuring greater stability and investor confidence.

North Korea’s Involvement in Cryptocurrency Theft

Amid these developments, South Korea’s law enforcement has uncovered a major cryptocurrency theft, further amplifying the need for stringent regulatory measures. The National Office of Investigation of the National Police Agency revealed that North Korean hackers were behind the 2019 theft of 342,000 Ethereum tokens from the cryptocurrency exchange Upbit.

The Heist and Its Aftermath

In 2019, the stolen Ethereum tokens were valued at approximately 58 billion South Korean won (USD 41.5 million). However, the tokens are now worth around 1.47 trillion won due to the significant appreciation in Ethereum’s value over the past few years. This marks the first official confirmation from South Korean authorities linking North Korea’s state-sponsored hacking groups, such as Lazarus and Andariel, to the theft.

North Korea’s Cryptocurrency Laundering Scheme

Authorities reported that North Korean hackers sold about 57% of the stolen Ethereum at a 2.5% discount below market price in exchange for Bitcoin. The remaining Ethereum tokens were laundered through 51 overseas exchanges, further complicating the investigation.

The theft is part of a broader pattern of North Korean involvement in cybercrimes aimed at financing the regime’s activities. These findings align with earlier reports from the United Nations and other global entities, which have accused North Korea of using cyberattacks to fund its military and political objectives.