<p>The South Korean government <a href="https://www.fsc.go.kr/no010101/80479?srchCtgry&#61;&amp;curPage&#61;&amp;srchKey&#61;&amp;srchText&#61;&amp;srchBeginDt&#61;&amp;srchEndDt&#61;" rel="noopener noreferrer nofollow">has taken a significant step</a> today in combating cryptocurrency crimes with the launch of a dedicated intragovernmental division. The newly established joint crypto-crime investigation division operates under the Seoul Southern District Prosecutors’ Office and comprises 30 skilled investigators from seven different government agencies.</p><h2 id="header-0">Multi-agency collaboration</h2><p>These agencies are the Public Prosecutors’ Office, the Financial Supervisory Service (FSS), the Korea Financial Intelligence Unit (FIU) of the Financial Services Commission (FSC), the National Tax Service (NTS), the Korea Customs Service (KCS), Korea Deposit Insurance Corporation (KDIC), and Korea Exchange (KRX).</p><p>The growth of the domestic crypto market in South Korea has been remarkable since the advent of cryptocurrency exchanges in 2014, attracting approximately 6.27 million individuals and reaching a valuation of 19 trillion KRW ($14.9 billion). Daily average trading volumes have surged to three trillion KRW, involving participants from various age groups, with individuals in their 30s and 40s constituting the largest share.</p><h2 id="header-1">Regulatory absence</h2><p>However, the absence of adequate regulations has exposed customers to unfair practices in virtual asset trading. Although <a href="https://medium.com/&#64;coinness.gl/koreas-virtual-asset-user-protection-act-to-take-effect-in-july-next-year-d3df61766cd6" rel="noopener noreferrer nofollow">the recent passage</a> of the Virtual Asset User Protection Bill at the National Assembly is encouraging, implementing comprehensive policies to safeguard crypto investors will take a significant amount of time.</p><p>The risks associated with virtual asset investments are highlighted by the frequent delisting of cryptocurrencies from the nation’s top five exchanges. In the past two years, 1,053 cryptos have been delisted, and an additional 1,010 have been flagged as risky. The prevalence of unstable cryptocurrencies has resulted in high price volatility, incurring losses for investors. This volatile environment has also given rise to various crypto-related crimes, including unlawful listings, market manipulation, illegal foreign exchange trading, and pyramid schemes.</p><h2 id="header-2">Two teams</h2><p>To address these challenges, the joint crypto-crime investigation division is structured with two teams. The research and analysis team will study virtual asset issuers and distributors, identifying suspicious transactions. Virtual assets found to be fraudulent will be reported to the investigation team, which will then conduct thorough investigations and pursue legal action against problematic projects, while also recommending regulatory enhancements. Profits obtained through illegal means will be confiscated by the Seoul Southern District Prosecutors’ Office.</p><p>The division’s main focus lies on virtual assets that have been rapidly delisted, those marked as risky, and those exhibiting significant price volatility. Committed to upholding fairness and transparency in the crypto industry, the joint crypto-crime investigation division will strive to protect market participants and make valuable contributions to the Korean economy.</p>

Korea’s Intragovernment Group Launched to Thwart Crypto-Related Crimes

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