- South Korea reveals its Joint Investigation Center for Crypto Crimes
- The multi-agency team aims to fill the void of an otherwise missing regulator in a bid to protect investors
- The team will spearhead a crackdown on crypto-related crimes in the domestic market
South Korean authorities have announced the formation of a joint investigations team to curb crypto-related crimes in the wake of a surge in fraudulent activities in the domestic market.
To date, over the last five years, nearly 1.02 trillion won (USD $797.81 million) has been misappropriated in crypto-related criminal activities in South Korea – epitomized by the fall of LUNA and TerraUSD back in 2022, where investors lost about USD $40 billion globally.
The announcement comes after South Korea’s National Assembly passed the Virtual Asset User Protection bill on June 30, 2023. The legislation aims to safeguard crypto investors and will go into effect in July 2024.
The Virtual Joint Investigations Team
The Joint Investigation Centre for Crypto Crimes comprises professionals across different law enforcement and financial bodies, including 30 personnel from the Financial Supervisory Service, Korea Customs Service, and National Tax Service.
Operating from the Seoul Southern District Prosecutors Office, the multi-agency team is set to investigate cryptocurrencies of high price volatility for money laundering, tax evasion, concealment of criminal profits, and unauthorized foreign exchange transfers, among other crimes.
The multi-agency investigations team further revealed that it would fill in the void of an overseer without a legally enacted regulator. According to the authorities, the scheme aims to protect the estimated 6.27 million South Koreans actively participating in the domestic crypto market, valued at $14.8 billion in 2022.
On the Flipside
- The absence of a clear and effective regulatory framework anchored under the law is a concern for preventing illicit activities.
- Recent crackdowns in the country have had little success deterring fraudulent activities, as crypto crime-related transactions in South Korea jumped 1,263% in 2022.
Why This Matters
South Korea’s crypto market was among the fastest growing worldwide before shrinking 66% by market capitalization late last year. The announcement of the joint investigations team is a bold move that looks to restore investor confidence across domestic and global crypto events.
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