Damages from cryptocurrency-related crimes in the country soared 118 per cent over the past five years to 1.02 trillion won ($797.81 million) last year
South Korea launched an interagency investigation unit to address crypto-currency crimes on Wednesday amid a jump in illegal activities in the market and a shortage of legal protections for investors.
The Joint Investigation Centre for Crypto Crimes will include around 30 personnel from judicial, financial, tax and customs agencies, the Prosecutors’ Office stated.
It stated that virtual assets are investment products that already compare to stocks, but market participants are, in effect, left out from legal safeguard due to insufficient laws and systems.
The Prosecutors’ Office added that until the crypto-currency market was regulated under law, the investigation team would bridge the gap in investor safeguard.
Damages from cryptocurrency-related crimes in the country soared 118 per cent over the past five years to 1.02 trillion won ($797.81 million) last year, as per the statement, with different types of crimes ranging from price manipulations to illegal foreign exchange transactions and ponzi schemes.
The Prosecutors’ Office stated that investigations would particularly target crypto-currencies of high price volatility or de-listing, for illegal trading practices, tax evasions, unauthorised foreign exchange transfers, hiding of criminal profits and money laundering.
South Korea’s crypto-currency market, which had been one of the fastest growing globally, decreased 66 per cent in 2022 in terms of market capitalisation, on a string of international and local events reducing investor sentiment, apart from high interest rates.
On the local front, most strikingly, a collapse of so-called stablecoin TerraUSD and its pair Luna in May last year led to public indignation over an alleged scam by Do Kown, the developer of the currencies and an international fugitive caught in Montenegro, who also faces forgery charges in the US.
Across domestic crypto-currency exchanges, suspected crime-related transactions surged 1,263 per cent, from 66 in 2021 to 900 in 2022, as per the statement.