South Korea Sets Up a New Crypto Unit to Fight Crimes
- Crypto-related crimes in South Korea have surged over the past 18 months.
- South Korean lawmakers recently passed a new law to protect crypto investors.
- The new investigation unit will focus on detecting crimes such as crypto-related tax evasion, market manipulations, etc.
South Korea has established a special investigation unit as part of its plans to combat the rise of crypto-related crimes and protect investors while the country develops its crypto regulations.
Local sources confirmed that the Seoul Southern District Prosecutors Office will set up a new special unit, the Joint Investigation Center for Crypto Crimes. As per the report, the new unit will include 30 investigators from different government agencies, such as the Korea Customs Service, the Financial Supervisory Service, and the National Tax Service.
The new unit will focus mainly on cryptocurrencies that have a volatile price or are at risk of being delisted. Furthermore, it will also investigate and expose illegal trading activities that seek to exploit the volatile characteristics of cryptocurrencies, such as insider trading and market manipulation.
The team will also investigate cases of illegal foreign exchange transfers, crypto-related tax evasions, and attempts to cover up illegal earnings. In addition, the team will be required to pursue cases of money laundering.
The Prosecutor’s Office noted that until the proper regulations are put in place, it will actively participate in protecting investors in the cryptocurrency industry. It added that one of its core objectives is to simplify the entire investigative process for criminal cases involving cryptocurrencies, from detection to analysis.
The Prosecutor’s Office said in a statement,
Virtual assets, which are traded for over 3 trillion won every day with more than 6 million participants, are already investment products comparable to stocks, but the laws and systems are not complete, so market participants are practically left out of the protection of the law.
Crypto-related crimes in South Korea have surged over the past 18 months. The Prosecutor’s Office noted that criminal activities involving cryptocurrencies increased from 66 in 2021 to 900 in 2022 and to 943 during the first half of 2023. These numbers reflect the urgent need to safeguard investors and ensure transparency.
Fortunately, South Korean lawmakers have made huge progress in their bid to address crypto crimes and protect citizens. The country’s National Assembly recently passed what is considered the country’s first policy aimed at protecting crypto investors.
The Virtual Asset User Protection legislation recommends a range of punitive measures for individuals involved in illegal crypto transactions, insider trading, and market manipulation. Some of the prescribed penalties include fines and prison sentences.
In addition, virtual asset service providers in South Korea are now required to provide insurance and take responsibility for user deposits.
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