A specialized investigations unit is being launched in South Korea for tackling the rise in crypto-linked criminal activities in the country.
The purpose of the virtual asset crime investigation unit, which will include multiple agencies, is to protect the interests of investors, while comprehensive regulations are developed for the crypto industry in the country.
The unit
There will be 30 investigators who will be part of the Joint Investigation Centre for Crypto Crimes, which will operate from the Southern District Prosecutors’ Office in Seoul.
These investigators will be called from a number of government bodies and agencies, which include the Korea Customs Service, the National Tax Service, the Financial Supervisory Service and the prosecution.
According to a statement from the Prosecutor’s office, virtual assets are also investment products that can be compared to stocks.
This is due to the fact that the market has more than 6 million participants and their daily trading volume is more than 3 trillion won, or $2.35 million.
However, they stated that as there are no complete systems and laws to govern the market, it means that the participants are not protected by the law.
Therefore, it said that they would take an active role in providing investors with protection in the crypto market until the implementation of appropriate regulations and measures.
This includes streamlining investigative procedures applicable to criminal cases related to the crypto space, ranging from the detection of crime to its analysis.
Such cases can be handled with greater efficiency with his fast-track approach and can also reduce illicit activities in the crypto industry.
Focus areas
The investigations will have some important focus areas and they will target cryptocurrencies that can be de-listed or are prone to high price volatility.
Investigation of several illegal trading practices will also be the responsibility of the new unit in order to combat them effectively.
These include insider trading and market manipulation, as these can be used for exploitation of the high volatility of some cryptocurrencies.
Cases involving attempts for concealing criminal profits, unauthorized transfers of foreign exchange, or tax evasion on crypto transactions will be some areas of focus for the investigative team.
Furthermore, cases of money laundering would receive special attention because the origins of illicit funds can be obscured with the use of cryptocurrencies.
Criminal activities
The Prosecutor’s Office said that the risks and challenges associated with the crypto space are growing and this is evident from the data.
Local crypto exchanges had seen a 1,263% increase in the number of transactions suspected to be related to criminal activities in the last 18 months.
In 2021, these transactions had been around 66, but they had risen to 900 last year and the first half of 2023 had seen them climb to 943.
One of the recent cases that made headlines involved Kim Nam-kuk, a politician in the South Korean opposition.
According to allegations, he conducted suspicious crypto trading activities that amount to a whopping 6 billion won.
The Prosecutor’s Office is also conducting an investigation into the Terra ecosystem that collapsed in the previous year.