In 2022, South Korean and Chinese citizens traded 5.6 trillion won ($4.3 billion) based on "illegal" password swaps, according to local sources familiar with the matter. Under the tightened license system, our government pays special attention to the operation of such funds.

On March 7, the local media released the data provided by the South Korean customs department. According to the customs department, the total amount of funds for economic crimes soared from 3.2 trillion won ($2.5 billion) in 2021 to 8.2 trillion won ($6.2 billion) last year.

Password transactions basically account for 70% of all illegal assets transactions captured by customs civil servants. However, there were only 15 transactions for capturing total digital assets ($4.3 billion). The purpose of the deal is to buy foreign virtual assets and prepare to sell them later in South Korea, where regulatory mechanisms separate the local market and make users' foreign passwords more expensive.

In August 2022, South Korean customs authorities reported the detention of 16 people involved in illegal foreign exchange transactions related to password property worth about $2 billion. Gradually from 2017, South Korea's Foreign Exchange Trading Law stipulates that physical objects participating in password transactions must be strictly supervised and approved by the Financial Information Services Federation. As a result, trying to participate in the world's password export trade, foreign participants or Chinese investors looking for better exchange course content overseas have been labeled "illegal".

In the same month of the same year, South Korea's Financial Intelligence Unit carried out actions against 16 foreign data encryption companies, including KuCoin, Poloniex and Phemex. It is reported that all 16 exchanges are engaged in business activities for domestic consumers, give Korean websites, carry out marketing activities for Korean customers, and give credit card consumption options for the purchase of digital currency. Such activities are under the jurisdiction of the financial industry's transaction reporting method.