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Bitcoin Trade That Gave Bankman-Fried His Millions

As of Asian morning hours, bitcoin trades just above $66,000 on most global exchanges. It commands over 93 million won on Korean exchanges such as Upbit, worth over $71,000 at current exchange rates. The “Kimchi premium” refers to the difference

As of Asian morning hours, bitcoin trades just above $66,000 on most global exchanges. It commands over 93 million won on Korean exchanges such as Upbit, worth over $71,000 at current exchange rates.

  • The “Kimchi premium” refers to the difference in Bitcoin prices on Korean exchanges compared to global bourses. Bitcoin is currently trading at a 10% premium in South Korea.
  • The arbitrage popularized by Sam Bankman-Fried involves buying bitcoin on a global exchange and selling it on a Korean exchange for a riskless profit in Korean won.
  • Pocketing the actual gains is difficult due to the South Korea’s strict capital controls.A profitable yet operationally difficult arbitrage trade is back in vogue as bitcoin prices now command an average 10% premium in South Korea.

As of Asian morning hours, bitcoin trades just above $66,000 on most global exchanges. It commands over 93 million won on Korean exchanges such as Upbit, worth over $71,000 at current exchange rates.

The phenomenon is the so-called “Kimchi premium,” named after a popular Korean dish of fermented cabbage, which refers to the difference in bitcoin prices on local Korean exchanges compared to global bourses.

The trade is simple in theory: One can buy bitcoin on a global exchange, transfer it to a Korean exchange, and sell it for a 10% riskless profit in Korean won.

 

FAQ: Buying Bitcoin Anonymously

What is the most anonymous way to buy Bitcoin?

The most anonymous way to buy Bitcoin is by using cash or a prepaid debit card at a Bitcoin ATM. Because there’s no third party involved—only the machine manufacturer and the user. Moreover, Bitcoin ATM verification processes are not overly strict; users only need to authenticate with any phone number to carry out transactions. However, Bitcoin ATMs are limited in number and availability across countries, with transaction fees ranging from 7% to 20%. 

The most anonymous way to buy Bitcoin is by using cash or a prepaid debit card at a Bitcoin ATM. Because there’s no third party involved—only the machine manufacturer and the user. Moreover, Bitcoin ATM verification processes are not overly strict; users only need to authenticate with any phone number to carry out transactions. However, Bitcoin ATMs are limited in number and availability across countries, with transaction fees ranging from 7% to 20%. 

The most anonymous way to buy Bitcoin is by using cash or a prepaid debit card at a Bitcoin ATM. Because there’s no third party involved—only the machine manufacturer and the user. Moreover, Bitcoin ATM verification processes are not overly strict; users only need to authenticate with any phone number to carry out transactions. However, Bitcoin ATMs are limited in number and availability across countries, with transaction fees ranging from 7% to 20%. 

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