A South Korean police officer has been indicted for his role in an operation to bypass China’s capital controls. Using bitcoin to transfer the funds, the case involves the movement of 12 billion won, approximately $11 million, by foreign exchange services in both China and South Korea.
China – South Korea Operation
The Incheon District Prosecutor’s Office recently announced that it had indicted a police officer of the Seoul Metropolitan Police Department (Mr. A, age 56) “on charges of violating the Foreign Exchange Transactions Act,” according to local publications.
The officer ran an illegal foreign exchange office in South Korea, Gyeonggi Newspaperreported. A Chinese employee of this exchange office (Mr. B, age 55) was also indicted, along with a Chinese deportee (Ms. C, age 43) who had been operating a money exchange office in China.
In China, Ms. C took customers’ yuan, which she then used to purchase bitcoins with and then transferred them to a Korean bitcoin exchange. The police officer then sold the bitcoins and transferred the proceeds into the accounts designated by the clients. In doing so, the officer received a commission as well as the advantage of the higher price of bitcoin in Korea than China, the publication explained, and quoted an official of the prosecution saying: […]