• South Korea has announced the formation of a Joint Investigation Center for Crypto Crimes, a multi-agency team that will spearhead a crackdown on crypto-related crimes in the domestic market.
• The team is made up of personnel from the Financial Supervisory Service, Korea Customs Service, and National Tax Service.
• The scheme aims to protect investors from fraudulent activities and illegal transfers, as well as provide legal protections for crypto investors.
South Korea Unveils Multi-Agency Team to Tackle Crypto Crimes
South Korean authorities have announced the formation of a joint investigations team to curb crypto-related crimes in the domestic market. To date, over the last five years, nearly 1.02 trillion won (USD $797.81 million) has been misappropriated in crypto-related criminal activities in South Korea – epitomized by the fall of LUNA and TerraUSD back in 2022, where investors lost about USD $40 billion globally.
The Virtual Joint Investigations Team
The Joint Investigation Centre for Crypto Crimes comprises professionals across different law enforcement and financial bodies, including 30 personnel from the Financial Supervisory Service, Korea Customs Service, and National Tax Service. Operating from the Seoul Southern District Prosecutors Office, the multi-agency team is set to investigate cryptocurrencies of high price volatility for money laundering, tax evasion, concealment of criminal profits, and unauthorized foreign exchange transfers, among other crimes.
Legal Protections For Investors
The announcement comes after South Korea’s National Assembly passed the Virtual Asset User Protection bill on June 30th 2023. The legislation aims to safeguard crypto investors and will go into effect in July 2024. The scheme aims to protect an estimated 6.27 million South Koreans actively participating in the domestic crypto market valued at $14.8 billion in 2022.
Lack Of Regulation
The absence of a clear and effective regulatory framework anchored under law is a concern for preventing illicit activities such as money laundering or fraud schemes targeting inexperienced retail investors who may not be aware of potential risks associated with trading cryptos on unregulated exchanges or investing through Ponzi schemes or ICO scams without proper due diligence checks prior to investing their funds into these projects or platforms .
Conclusion
Overall this new joint investigation center will help tackle crypto related crimes by providing legal protection investments as well as cracking down on illegal activities being carried out within South Korean markets such as money laundering or fraud schemes targeting inexperienced retail investors who may not be aware of potential risks associated with trading cryptos on unregulated exchanges or investing through Ponzi schemes or ICO scams without proper due diligence checks prior to investing their funds into these projects or platforms .