South Korea is among the biggest name when it comes to cryptocurrency trade. A country with a massive number of cryptocurrency investors and holders, South Korea has been very supportive of cryptocurrencies until recent months. Rumours began to float that South Korea may be considering a ban on cryptocurrencies - but the government later clarified that there was no such plan. 

However, despite having a somewhat lenient stance on the crypto-trade going around in the nation, the country has been very strict on anyone who has been evading their taxes or using cryptocurrencies for illegal purposes. Reports from South Korea claim that three cryptocurrency exchanges in the nation have now been raided by the Seoul Southern District Prosecutor’s Office over embezzlement of customer funds. It is being suspected that the funds deposited by customers are being used by the exchange and their employees to invest in other cryptocurrency exchanges.

In these raids, the prosecutors confiscated a number of items from the exchanges, including but not limited to mobile phones, computer hard drives, accounting statements and money transfer receipts. South Korea’s Financial Services Commission has not named any of the raided exchanges, but has stated “It is ‎difficult to indicate the specific amount of forfeited assets at this point.”‎

South Korean financial authorities have been warning cryptocurrency exchanges for about three months now. In January, the Financial Services Commission of the nation had hinted that they were indicating exchanges suspected of insider trading, as well as embezzlement of customer funds. Activities such as money laundering too, were under their scanner and these raids look like the authorities have made some breakthrough in this direction.

A prosecutor was quoted saying: "The firms turned up on our radar in January during our investigation of suspicious money transfers between Bitcoin exchanges that were detected during an audit by the Financial Services Commission and the Korea Financial Intelligence Unit." The three cryptocurrency exchanges which have been raided are reportedly under the control of South Korea’s Financial Services Commission for the time being. 

Earlier this year, some South Korean government officials were accused of being a part of a major insider-trading scandal involving cryptocurrencies. This was followed by the country instructing government officials to declare their cryptocurrency investments, which was later followed by a regulation stating they can no longer be involved in cryptocurrency trade. The country has banned ICOs since September (but is looking forward to relax the rules now). 

These raids prove that South Korea will continue to be strict on cryptocurrency platforms and exchanges which do not comply with laws, or are doing something illegal such as money laundering or insider trading. In other, related news, South Korea’s biggest messaging platform KakaoTalk’s parent company, Kakao is all set to launch their own cryptocurrency, the Kakao Coin - which aims at becoming a cash-alternative in the nation!