South Korea Steps Up Scrutiny of Crypto Mining Chip Imports

Country’s border control agency moves to tackle fire hazards and prevent entry of illegal products

by Deyana Laguna
19 April • 2 min
In Regulation

South Korea’s border control agency, the Korea Customs Service (KCS), has added cryptocurrency mining chips to its list of imported electronic goods under high scrutiny, KCS revealed on its website on Wednesday.

This will come as a blow to miners in South Korea, who must now comply with stricter standards for importing their equipment. The KCS will investigate the safety issues surrounding imported virtual currency mining chips based on the country’s existing radio legislation, as well as the safety requirements for electronic goods framed by the National Radio Research Agency, a government body that sets standards for related regulations.

The rationale behind the decision is to tackle the fire hazards associated with the crypto mining chips’ significant electrical power consumption and excessive heat emission. The extra measures will also help prevent the entry of illegal products in the country.

According to South Korean media outlet Kyunghyang, KCS’s move comes after the agency noted a steep increase in the amount of crypto mining equipment entering the country. In the final two months of 2017 alone, 454 mining chips worth an estimated KRW 1.3 billion (USD 1.2 million) were imported into South Korea, the report states.

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The tighter regulation comes at a time when both public and private sectors within the country are making drastic moves to stop reportedly illegal crypto mining activities. Earlier this month, the South Korean authorities arrested 14 people from 13 firms for illegally using cheap electricity to mine cryptocurrencies at industrial complexes. The companies had each reportedly installed between 100 and 350 bitcoin mining devices within the premises of their industrial complexes, which the local police said is in violation of rules regarding factory use.

Last August, a Seoul-based electronics retail marketplace, Yongsan Market, also banned vendors from mining digital currencies in their stores, citing electrical costs, rising temperatures and the risk of fire.

Interest in digital money is starting to grow in South Korea, with the local cryptocurrency exchange Bithumb recording high trading volumes in recent months. Meanwhile, the government is tightening restrictions more broadly. The authorities have already banned foreign speculation on Korean crypto exchanges and ended the practice of anonymous cryptocurrency trading in the country.