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Cryptocurrencies

Bitcoin bucks 'law of one price' to regulators' dismay

Traders target cryptocurrency's so-called 'kimchi premium'

A cryptocurrency exchange board in South Korea. Varying prices across and within borders present traders with arbitrage opportunities.    © Reuters

TOKYO -- The vastly different price of digital currencies between countries and exchanges has led investors to seek out arbitrage opportunities with greater zeal, a trend that has caught the eye of financial watchdogs around the world.

The price of bitcoin in South Korea is relatively high compared to other markets, a gap known as the "kimchi premium." When the price of bitcoin soared in January, 1 bitcoin was worth about 2 million yen in Japan but the equivalent of about 2.6 million yen in South Korea. That's a premium of 30%, though the kimchi premium has reached as high as 50% at times.

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