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A South Korean appellate court has confirmed the prison sentences for a group of cryptocurrency traders who capitalized on the kimchi premium to generate substantial profits.
Nocut News reported that the Daegu District Court Criminal Division upheld all but one of the initial rulings and penalties. A 43-year-old leader of the group is facing a potential prison term of up to three years.
Kimchi Premium: Appeal Denied
Nonetheless, the judge did overturn one of the traders’ convictions. In the initial trial, this individual (name withheld for legal reasons) received an 18-month suspended prison sentence.
However, Presiding Judge Oh Deok-sik determined on June 12 that this sentence was “excessively lenient,” subsequently sentencing this trader to 18 months in prison.
All traders were found guilty of breaching the Act on Reporting and Use of Specific Financial Transaction Information and the Foreign Exchange Transaction Act.
The court was presented with evidence indicating that the group illegally smuggled hundreds of billions of won in foreign currency into the nation by reselling cryptocurrency acquired in Japan.
Prosecutors detailed that the group collaborated with a set of Japanese investors. Together, they devised a meticulously planned strategy to take advantage of the kimchi premium.
At that time, Bitcoin (BTC) prices were considerably higher in South Korea, with demand surging as trading volumes on local crypto exchanges increased.
Prosecutors stated that the group illegally transported approximately 400 billion won ($296 million) worth of foreign currency across borders.
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The overseas investors compensated the group with around 27 billion won (nearly $20 million) for their services.
The kimchi premium as calculated by Scolkg/Cryprice at the time of writing. (Source: Scolkg/Cryprice)
Traders Assert Innocence
The defendants refuted all allegations, asserting that the transactions could not be categorized as “capital transactions,” since they involved cryptocurrency rather than cash. Therefore, these transactions were not subject to typical declaration regulations.
However, the appellate court dismissed these assertions. The judge ruled that the defendants “exploited the price discrepancies between nations for virtual assets to export foreign currency and earn commission fees.”
The judge further stated that the original sentence “seems to be appropriate.” Justice Oh noted that the court had found “no additional evidence that would necessitate a modification of the sentence.”
Education Ministry accused of shielding group tied to after-school certification scandalhttps://t.co/Z2fVGqwR8X
— The Korea Times (@koreatimescokr) June 11, 2025
In the case of the trader who was sentenced to prison instead of receiving a suspended term, the court clarified that although this individual earned just over $4,000 in “commission fees,” the severity of this individual’s offense was significant.
The court noted that this trader held a prominent position in the business sector and utilized shell companies to carry out the crime. The judge remarked:
“Considering [this person’s] role and position, the court rules that the original sentence was excessively light.”
The post South Korean Appeals Court Upholds Kimchi Premium Traders’ Jail Sentences appeared first on Cryptonews.
