The South Korea government is investigating the use of cryptocurrency in illegal foreign currency exchange, according to a statement.

Released

on Jan. 31 by the Korea Customs Service (KCS), the statement alleges that a total of 637.5 billion won worth (or around $600 million) in foreign currencies have been exchanged illegally, including unrecorded capital outflow using cryptocurrencies.

The investigation is part of a broader effort across South Korean authorities to examine cryptocurrency-related activities. It also comes just days after the country's financial watchdog formally banned anonymous cryptocurrency trading accounts, which took effect on Jan. 30.

While the KCS did not give any name of entities that were accused of illegal currency exchange using cryptos, it outlined methods that are commonly adopted based on its investigation.

In one case, which also accounts for majority of the alleged amount, the KCS said unregistered currency exchanges remitted 472.3 billion Korean won ($443,962,000) for customers between South Korea and Australia from March to December last year – transactions facilitated by cryptocurrencies.

While the KCS did not disclose whether it is taking any legal actions currently against these businesses, it said it will continue the effort in investigating on similar activities as well as illicit use of cryptocurrency in money laundering and smuggling illegal goods such as drugs.

South Korean won image via Shutterstock.