South Korean authorities are taking decisive steps to combat the surge in cryptocurrency-related offenses by considering the establishment of a dedicated investigative unit. The nation’s Justice Ministry and the Ministry of the Interior and Safety are set to commence discussions regarding the creation of the Joint Virtual Asset Crime Investigation Unit as an official department in early May.
The unit, which currently operates under the auspices of the Seoul Southern District Prosecutor’s Office as a temporary entity, will transform into a permanent establishment. This evolution entails the appointment of new prosecutors and the allocation of a dedicated budget.
Specialized Task Force Targets Digital Asset Crimes
Launched in July of the preceding year, the unit represents South Korea’s inaugural body exclusively dedicated to combatting digital asset-related offenses. Comprising 30 experts drawn from seven distinct financial and taxation authorities, its inception marked a significant milestone in the nation’s efforts to address the growing complexity of crypto crimes.
Rising Trends in Crypto Criminal Activities
The move comes amidst a notable uptick in cryptocurrency-related illicit activities within South Korea. A February report from the nation’s Financial Intelligence Unit (FIU) revealed a staggering 48.8% increase in flagged suspicious transactions since 2022, totaling 16,076 cases. These transactions were associated with various illegal activities, including money laundering, market manipulation, and illicit drug trades.
The surge in reported cases can be attributed in part to heightened engagement between the FIU and local cryptocurrency service providers, urging vigilance in reporting suspicious activities. Consequently, there has been a 90% surge in crypto-related cases forwarded to law enforcement for investigation.
Recent Successes in Law Enforcement
Law enforcement interventions have also yielded significant results. In a recent operation, the Haeundae Police Station in Busan apprehended two individuals responsible for orchestrating a cryptocurrency investment scam, resulting in the theft of 5.5 billion won (approximately $4.1 million). The perpetrators had promised exorbitant returns of 70% on monthly investments totaling 1 billion won.
Amidst these developments, South Korea is poised to implement its inaugural crypto regulatory framework on July 19th. The “Virtual Asset User Protection Act,” passed in July 2023 with a one-year grace period, will impose stricter penalties on market manipulators, including the possibility of life imprisonment based on the severity of the offense. The establishment of the Joint Virtual Asset Crime Investigation Unit underscores the nation’s commitment to fostering a safer and more secure crypto environment.
