In a proactive move to curb the surge in cryptocurrency crimes, South Korean authorities are considering the establishment of a permanent investigative body. Discussions about forming the Joint Virtual Asset Crime Investigation Unit as an official department are set to begin in early May. This initiative will be led by the nation’s Justice Ministry and the Ministry of the Interior and Safety.

Currently, the unit functions temporarily under the supervision of the Seoul Southern District Prosecutor’s Office. The proposed upgrade involves appointing additional prosecutors and securing a dedicated budget. This enhancement reflects South Korea’s commitment to addressing the complexities of digital asset-related offenses.

Rising Crypto Crimes in South Korea

South Korea has seen a dramatic increase in crypto-related crimes, with a 48.8% surge since 2022. The Financial Intelligence Unit of South Korea reported that in February alone, 16,076 transactions were deemed suspicious. These activities span a variety of illegal endeavors including money laundering, market manipulation, and the trading of illegal drugs.

This increase in criminal activity is largely due to the FIU’s intensified collaboration with local cryptocurrency service providers. These efforts have not only improved reporting of suspicious transactions but have also led to a 90% rise in crypto cases being passed on to law enforcement agencies.

Enforcement and New Regulations

In a notable enforcement action, the Haeundae Police Station in Busan arrested two individuals for a scam involving 5.5 billion won ($4.1 million). These fraudsters promised investors a 70% return on a monthly investment of 1 billion won.

On the regulatory front, South Korea is gearing up to implement its inaugural crypto regulatory framework on July 19. This framework, known as the “Virtual Asset User Protection Act,” was passed in July 2023 and includes a one-year grace period. It introduces stringent penalties for crypto market manipulators, potentially leading to life sentences depending on the crime’s severity.

The establishment of the Joint Virtual Asset Crime Investigation Unit right after the law’s passage underscores South Korea’s dedicated approach to safeguarding its digital economy.

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Filed under: Bitcoin - @ April 29, 2024 8:21 pm