“Why can’t I pay”… Cryptocurrency ‘Kimchi Premium’ confused by credit card company

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© News1 Designer Choi Soo-ah

In the so-called’Kimchi Premium’ phenomenon, where cryptocurrency is traded more expensive domestically than overseas, more investors are seeking arbitrage (arbitrage). Card companies are restricting the purchase of cryptocurrency with domestic cards at overseas exchanges, but the expressions of confusion are a series of complaints from investors.

According to the card industry on the 22nd, domestic card companies are restricting payments from overseas cryptocurrency exchanges.

Earlier in 2018, the Ministry of Strategy and Finance and the Financial Services Commission recommended that card companies stop payment services at overseas virtual currency exchanges. The reason was that there were possible violations of the anti-money laundering, illegal current financial channels, violations of the Specialized Credit Finance Business Act, and the Foreign Exchange Transactions Act due to speculative transactions.

Hana Card posted a related announcement on the 16th and announced that it is restricting transactions with overseas virtual currency affiliates according to the recommendations of the Ministry of Information and Finance and the Financial Services Commission.

Even though credit card companies are restricting transactions, there have been some inquiries from customers because there have been cases where some payments have been made until recently. Some investors have yet to share information that certain cards can be settled, or even boasted’payment success stories’.

An official in the card industry explained, “Since overseas merchants cannot manage merchant information immediately, payment is made first, and when information is received from the brand company Visa and Master, they will recognize that it is a cryptocurrency exchange.”

When one card company knows about the exchange information, it is explained that they are responding by sharing the related information with the eight card companies and blocking them together.

The official said, “As the number of cryptocurrency transactions has increased recently and the number of overseas exchanges itself has increased, it is not easy to control, so some transactions may have been made.” We are responding to this,” he added.

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