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South Korea’s devotion to addressing crypto crime is evident in unveiling the interagency unit. The East Asia country shows renewed determination to fight criminal crypto-related criminal activities by establishing a specialized investigation unit.

Joint Investigation Center Unveiled to Curb Crypto-Related Crime in Korea

The joint crime unit prioritizes safeguarding the interests of Korean investors as the country gears toward comprehensive regulations. The multi-agency unit dubbed Joint Investigation Center for Crypto Crimes (JIC) will operate under the Seoul Southern District Prosecutors’ Office. It features 30 investigators selectively tapped from various government bodies. Besides the prosecution, the unit will draw membership from Korea Customs Service, Financial Supervisory Service, and the National Tax Service. 

The Prosecutor’s Office admitted that virtual assets in Korea experience a vibrant trade estimated to transact 3 trillion won, translating to an average of $2.35 million daily. The trade attracts over six million participants. 

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The digital assets sector is gaining ground as cryptos are labeled investment products with comparable returns to the stocks. Nonetheless, laws and systems to govern the sector are incomplete. Such a situation excludes market participants from the protection enshrined in Korean law.

Prosecutors’ Office Prioritizes Investors’ Protection in Korean Crypto Market

The Prosecutors’ Office reiterated its mission to play an active role in protecting investors in the Korean crypto market till the implementation of appropriate regulations. As such, the office identifies its primary goal is streamlining the investigative procedures deployed when processing crypto-related crime.

The Prosecutors’ Office considers that an interagency investigation unit would help harmonize the procedures applied in crime detection and analysis. Establishing a fast-track approach will support the efficient handling of crypto-affiliated crime cases. The Prosecutors’ Office projected that the coordinated efforts within the Joint Investigation Centre would contribute towards averting illicit activities within the cryptocurrency ecosystem.

South Korean Interagency Investigation Identifies Focus Areas

The South Korean unit prioritizes scrutinizing cryptocurrencies exhibiting abnormal price volatility and those likely to de-list. The new unit targets restoring sanity in the crypto industry by opening investigations on illegal trading practices. It seeks to combat market manipulation and insider trading likely to exploit the volatile nature of digital assets.

The investigation team will have an expanded scope to scrutinize and curb tax evasion orchestrated via crypto transactions. The role would investigate incidents of unauthorized foreign exchange transfers and dishonesty by parties to conceal the realized profits.

Korea’s Multi-agency Scrutiny to Weed Out Money Laundering

The Joint Investigation Centre would mirror the UK’s Financial Conduct Authority in actively scrutinizing foreign-bound transactions to weed out money laundering activities. 

The Prosecutors’ Office admits that the anonymity of cryptocurrencies makes it a preferred conduit to conceal the origin of illicit funds. 

The Prosecutors’ Office acknowledges that the heightened crypto market activity leaves South Korea on the verge of brewing a catastrophic crisis. The office warns that such could spill over to the traditional financial sector, thus plunging the country into crisis.

Crypto Crime Emerges as a Lurking Predator in Korea

Establishing the joint investigation unit is prudent, given that heightened cryptocurrency activities portray a lurking predator that could devour investment. It estimates the suspected crime-related transactions executed by local crypto exchanges increased by 1263% in 1.5 years. The office notes that the cases rallied from 66 in 2021 to realize 900 in 2022 and 943 in the first and second quarters of 2023. 

The move by the Prosecutors’ Office is informed by the observable crypto crimes surfacing in Korea. A recent high-profile case involves the country’s opposition politician Kim Nam-kuk. The politician is embroiled in a $4.54 million crypto fraud. 

Also, the prosecutors admitted to opening investigations on the Terra ecosystem that collapsed in 2022. The ecosystem supported TerraUSD (UST) stablecoin alongside the affiliate LUNA token, ranked ninth and tenth largest cryptos by market capitalization. Their sudden implosion in May 2022 eliminated $55 billion in the investors’ wealth.  

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Michael Scott

By Michael Scott

Michael Scott is a skilled and seasoned news writer with a talent for crafting compelling stories. He is known for his attention to detail, clarity of expression, and ability to engage his readers with his writing.