South Korean Ministries of Justice and Security and Public Administration are collaborating to upgrade their crypto crime investigation unit to the rank of a permanent department.
According to Segye Ilbo, we will witness discussions on budget allocation and the selection of prosecutors early next month, among other topics. The current branch comprises prosecutors affiliated with the Seoul Southern District Prosecutors’ Office. The entity is temporarily susceptible to dissolution at the government’s discretion.
Established in July, the investigative unit consists of approximately thirty specialized personnel. The organization oversees the operations of seven governmental entities: the National Tax Service, the Financial Intelligence Unit (FIU), the Prosecutor’s Office, and the Financial Supervisory Service.
Permanent departments would interact equally with domestic and international government agencies. Following the implementation of the Virtual Asset User Protection Act on July 19, the department could anticipate a rise in its caseload. This legislation establishes severe penalties, including life imprisonment, for crypto-related offences that exceed 5 billion won ($3.6 million).
Already, enforcement actions against offences involving virtual assets are increasing. In 2023, law enforcement received 16,076 reports of suspicious transactions, an increase of 48.8% from the previous year. Additionally, reports of suspected crypto-related offences increased by 90%.
South Korea is executing a range of measures to establish regulation on its cryptocurrency market. It has implemented stricter rules for listing tokens on local exchanges and declared intentions to intensify oversight of exchanges and terminate those that fail to comply with the guidelines put forth by the Financial Action Task Force.
In South Korea, cryptocurrency has also become a political issue. Prominent political parties have pledged to relax restrictions before this year’s parliamentary elections.
The administration of President Yoon Suk Yeol, which assumed office in 2022, postponed the implementation of a 20% tax on crypto capital gains, which was initially scheduled to occur between 2023 and 2025. Meanwhile, the administration places a greater emphasis on the tax collection of cryptocurrencies.
