According to local media, South Korea is stepping up its efforts to tackle the increasing number of crimes and fraud cases using cryptocurrencies. They are now in the process of formalizing their virtual asset investigation unit, which was previously only operational temporarily.
The crypto industry has recently seen an uptick in complaints about potentially fraudulent transactions, prompting this step. There was a 49% rise from the previous year, with over 16,000 reports received.
South Korea is reportedly thinking of making its Virtual Asset Joint Investigation Team, a temporary agency that investigates crypto crimes, a permanent department.
In light of the current trial of the South Korean cryptocurrency issuer, who is facing fraud charges, the prosecution and the Ministry of Justice are pushing for the official formation of the Virtual Asset Joint Investigation Team in order to strengthen investigative capacities. It is worth mentioning that in early May, talks will begin between the Justice Ministry and the Ministry of the Interior and Safety on the unit’s elevation to an official department.
The unit is now under the supervision of the Seoul Southern District Prosecutor’s Office as a temporary entity, and its dissolution is a real possibility. The paper claims that raising its status will make it more efficient. Appointing additional prosecutors and better allocating funds will accomplish this.
Launched on July 26, 2023, the Virtual Asset Joint Investigation Team is responsible for looking into crimes using coins. Roughly thirty investigators from seven agencies, including those in charge of prosecution and finance, make up this group. Several important parties are involved in the investigations of crimes involving virtual assets, and this team works with them.
Concerns over the unit’s temporary status might result in its abolition, notwithstanding the great success it has accomplished. Cases such as the dissolution of the Securities Crime Joint Investigation Team in January 2020 by the Southern District Prosecutors’ Office demonstrate the need of a structured investigation organization to guarantee fair communication and collaboration with relevant organizations.
The Financial Intelligence Unit of South Korea found that illicit operations using cryptocurrency increased significantly.
A study dated February 2023 by the Financial Intelligence Unit of South Korea said that local cryptocurrency firms reported 16,076 questionable transactions, a 49% rise over the previous year. Damages from crimes involving virtual assets surpassed 5.3 trillion won in the five years spanning 2017–2022.
South Korea will launch its first comprehensive cryptocurrency legislation on July 19 to protect investors. More severe criminal penalties for manipulating cryptocurrency markets are part of the new rule. Involvement in some offences covered by this rule carries the potential for life sentences or substantial penalties.
A virtual asset issuer’s CEO, Mr. Han, is facing charges of conspiring with a professional market manipulation firm called “John Berkim” to bilk investors out of 21.6 billion won. His surrender on the 5th brought him before a trial. Mr. Han introduced and listed the useless currency “Grape” in December 2020. The coin reportedly employed strategies, including market manipulation, to make a lot of investors lose a lot of money.
One illustration of the growing number of crimes using virtual assets is the Grape Coin fraud case. Crimes using virtual assets and the amount of harm they do are on the rise as they become more popular as an investment option.
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