SEOUL, Feb. 8 (Korea Bizwire) – International travel expenses among South Koreans increased 15-fold last month amid reports that a record number of cryptocurrency investors travelled abroad to buy cryptocurrencies on the cheap.
According to lawmaker Lee Hyun-jae, who is also a member of the Strategy & Finance Committee, international travel expenses amounted to nearly 42 billion ($38.5 million) won in January, citing data from the Korea Customs Service.
The figure is up 1,500 percent from the same time a year ago, accounting for over half of all the money spent abroad last year.
Lee argues a growing number of investors joining the international cryptocurrency speculation world are behind the sudden surge in travel expenses, as South Koreans flocked in droves to cryptocurrency investment hot spots like Japan, Hong Kong and Thailand.
“Prices of cryptocurrencies in South Korea are significantly higher than abroad, thanks to the ‘kimchi premium’ — a reference to the 15 to 25 percent premium on Bitcoin prices locally compared with foreign markets,” said Lee.
“Investors are taking advantage of the fact that there is no cap on travel expenses, so they are buying cryptocurrencies at cheaper prices in Japan, Hong Kong, and Thailand, and selling them back in South Korea for a substantial profit,” Lee added.
Lee says more needs to be done by the government to stop cryptocurrency investors from transferring money abroad in the name of travel expenses.
“The Ministry of Strategy and Finance and the Korea Customs Service need to strengthen monitoring of large international travel expenses to stop the capital flow for foreign cryptocurrency investment and introduce countermeasures such as inspections into foreign cryptocurrency exchange fraud.”
Under the current foreign exchange transactions act, South Koreans are required to declare to customs any currency over $10,000 being taken abroad.
The average age of people transferring money to foreign countries was estimated at 38 years old in January, down significantly from last year when the average age was 46.
Hyunsu Yim (email@example.com)