South Korea launches crypto crimes investigation unit

South Korea has launched a crypto investigation unit to combat illicit activities in the digital asset industry. 

According to a Reuters report, the Joint Investigation Centre for Crypto Crimes comprises a team of roughly 30 specialists from several areas, including the legal, financial, tax, and customs sectors.

The lack of proper legal safeguards for virtual assets, frequently compared to regular equities regarding investing importance, has left market participants open to abuse. The Prosecutors’ Office recognized the critical need to close this regulatory gap. It emphasized the team would protect investors until more thorough legislation and processes can be implemented to oversee the crypto market.

Given the multifaceted nature of crypto crimes, the investigation team will focus on cryptocurrencies with high price volatility. The officials believe they provide ideal conditions for illicit trading, tax evasion, unauthorized foreign exchange transfers, the covert accumulation of criminal profits, and massive money laundering operations.

Crypto crimes in South Korea

Damages from cryptocurrency-related crimes in South Korea have skyrocketed over the previous five years, increasing by 118% to a whopping 1.02 trillion won ($797.81 million) in 2022. Ponzi schemes and price fixing are two of the most well-known examples of financial fraud, although they are only two of many criminal practices under this umbrella.

Compared to its meteoric rise in value the year before, South Korea’s crypto industry saw a depressing 66% year-over-year decline. There was a perfect storm of overseas and local events that lowered investor mood, and this was compounded by rising interest rates, which sent the market spiraling downhill.

The May 2022 cataclysmic collapse of the so-called stablecoin TerraUSD and its accompanying Luna sent shockwaves across the country. Allegations of fraud against Do Kwon, the architect of these doomed currencies, exacerbated the subsequent public outrage.

Kwon was arrested by the law in Montenegro, where he had taken refuge after attempting to flee prosecution; he is now also facing several fraud accusations in the United States.

By pooling resources from several organizations, the government hopes to send criminals and would-be wrongdoers a clear message that they cannot get away with their illegal activities. As the inquiry team begins its work, there is optimism that it will provide the accountability and security the world needs.