South Korea has taken several important steps to address the rise in illegal activity tied to cryptocurrency. The nation’s new multi-agency Joint Investigation Center for Crypto Crimes aims to safeguard investors’ interests. It will operate while awaiting comprehensive cryptocurrency business regulations.
The specialist team will be located at the Seoul Southern District Prosecutors’ Office. It will comprise 30 investigators from various government organizations. Virtual assets’ substantial daily trade volume and vast user base raise pressing concerns. The combined virtual asset criminal investigation seeks to address these issues.
Virtual assets rival stocks in size but lack complete legal frameworks, leaving participants vulnerable to illegal activity. The Prosecutor’s Office is aware of the gap and aims to protect crypto investors. The Prosecutor’s Office will act until proper legislation is established.
One main goal is streamlining crypto-related criminal investigations from detection to analysis. This allows for quicker and more effective responses to new threats. The investigations’ primary focuses include high price volatility and delisting threats.
The specialized team will also deal with unethical trading methods including insider trading and market manipulation, which take advantage of the unpredictable character of some cryptocurrencies to take advantage of naive investors.
South Korea Specialized Unit Battles Crypto Crimes and Pursues Safer Regulations
The unit’s scope includes looking into cases of tax evasion involving cryptocurrency transactions, improper international transfers, and attempts to hide illicit earnings. Additionally, the team will proactively fight money laundering, as cryptocurrencies can be used to conceal the sources of illicit payments.
The Prosecutors’ Office disclosed that the number of suspected crime-related transactions on local cryptocurrency exchanges increased by an astounding 1,263% over the past 18 months: from 66 in 2021 to 900 in 2022 and 943 in the first half of 2023. This underscores the urgency of the situation.
Recent high-profile incidents, like opposition South Korean politician Kim Nam-kuk’s involvement in shady cryptocurrency trading activities worth 6 billion won ($4.54 million), highlight the need for strong action.
The Seoul Southern District Prosecutors’ Office is looking into the collapse of the Terra ecosystem last year in addition to dealing with current crypto crimes. The TerraUSD (UST) stablecoin and LUNA token collapsed in May 2022. The implosion wiped out nearly $55 billion in investor funds.
The specialized unit is expected to contribute to stronger rules and safer crypto market participation. South Korea is making significant efforts to address crypto-related crimes. The Joint Investigation Center aims for a safer environment, pooling resources and knowledge from various organizations. It seeks to protect investors and legitimate participants in the crypto market.