South Korean authorities are zeroing in on new types of financial crimes using financial technology platforms and digital assets still operating under vague legal boundaries.

Seoul Main Customs, the regional office of the country’s customs agency, said Wednesday that it has discovered unlawful foreign exchange dealings in which dozens of people had tried to take advantage of the “kimchi premium.”

“Kimchi premium” refers to the gap in cryptocurrency prices on domestic exchanges for cryptocurrency assets such as bitcoins, ether and ripple compared to foreign exchanges.

The illegal financial transactions suspected from the local customs agency’s probe during the April-June period were worth some 1.69 trillion won ($1.49 billion) combined, it noted.

The list includes illegal foreign exchange transactions worth 812.2 billion won, while 785.1 billion won was remitted overseas to purchase cryptocurrencies and falsely reported as costs for trading or studying abroad. An additional 95.4 billion won was withdrawn from ATMs overseas using domestic credit cards and illicitly paid to cryptocurrency exchanges there.

With 33 people nabbed in the latest crackdown, 14 of them were reported to the prosecutors’ office and 15 were imposed fines totaling 26.3 billion. The remaining four are under investigation and will be either fined or sent to the prosecutors’ office, the local customs office said.

The possibility of criminal acts using the virtual assets has increased, backed by a recent spike in cryptocurrency prices. Following a pangovernmental effort to clamp down on such alleged cases from April to September, the tax agency also beefed up its investigations.

“We will continue to probe into alleged illicit foreign exchange dealings and money laundering cases involving cryptocurrencies. We also vow to conduct detailed analysis on criminal acts of cryptocurrencies being used in unlawful ways for more crackdowns,” a Seoul Main Customs official said.

Meanwhile, the National Tax Service has also launched investigations into 46 individuals and firms suspected of dodging taxes using fintech platforms and hidden overseas accounts.

The tax agency is looking at people who used secret accounts overseas to park money earned by illegal practices, as well as companies evading taxes by using fintech and other online trading platforms.

One of the tax evasion cases involves an online store owner in Korea who sold items through global open markets such as eBay and Amazon. The owner did not report money received through fintech platforms of online payment service providers. A plastic surgery hospital in Korea also did not report medical bills paid by foreigners with credit cards issued abroad.

“We are tracking global online transactions via payment service provider companies. The NTS will strengthen international cooperation to eradicate unfair offshore tax evasion activities,” the tax authority said.

Since 2019, the tax office has collected a combined 1.45 trillion won in unpaid taxes from offshore tax evaders.