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South Korea is inadvertently sending another warning to users of centralized digital assets, showing that they can be monitored and controlled.
This time, local government authorities in the South Korean city of Iksan say they will crack down on cases of illegal use of a local stablecoin.
News reported that the government of the provincial city of Jeolla del Norte had announced a “crackdown to eradicate the illegal distribution” of the Iksan Dairom token. blockchain-based currency uses technology provided by telecommunications giant KT and its smartphone-based Good Pay ecosystem.
Similar projects led by KT are being used in other cities in South Korea, such as Gumi, Gimpo and Ulsan.
tokens replace paper gift cards issued by many South Korean cities in an effort to promote local businesses that risk being overshadowed by larger national or international brands.
According to the Iksan City website, in addition to the large superstores operated by conglomerates, several other companies are also prohibited from accepting Dairom as a means of payment, namely: casinos, gambling and lottery-related activities, forms illegal speculators, shops, massage parlors and pubs that offer services related to ‘entertainment’.
However, the city says it has evidence that many small businesses are attempting to violate these regulations.
city said it was using blockchain technology to analyze Big Data from the local currency operating system to “monitor suspicious transactions such as fraudulent uses involving the token in” real-time financial transactions. “
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Iksan added that he wanted to investigate cases in which token recipients obtained coins “without selling goods or rendering services”, as well as cases in which token payments exceeded the value of the goods or services.
In some cases, merchants appear to have ‘repeatedly’ bought tokens ‘in someone else’s name and then exchanged’ them for KRW trustees.
Fines will be issued locally for misdemeanors, the city added, adding that it will seek to prosecute major offenders and punish them with fines of up to $ 16,740.
A spokesman for the city was quoted as saying:
“We will continue to crack down on illegal distribution. We will prevent the illegal distribution of Iksan Dairom and stop illegal transactions at the source [to help] relaunch the local economy.
____Learn more: – Countries should avoid “regulatory arbitrage” for stablecoins – FSB – Crypto in Chaos, but Blockchain-based Pay and Stablecoin thrive in South Korea
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