The South Korean Ministry of Justice and Ministry of Security and Public Administration are collaborating to upgrade their crypto crime investigation unit to a permanent department, as per a report from local press. Discussions regarding budget allocation and the appointment of prosecutors will take place at the beginning of next month, according to Segye Ilbo. Currently, the unit operates on a temporary basis and could be dissolved at the government’s discretion. The unit, which was established in July, is comprised of approximately 30 experts and coordinates the efforts of seven government agencies, including the Prosecutor’s Office, Financial Supervisory Service, Financial Intelligence Unit (FIU), and National Tax Service.
If elevated to a permanent department, it would engage with domestic and international government agencies on an equal footing and can anticipate a rise in caseloads once the Virtual Asset User Protection Act comes into effect on July 19. This act imposes penalties of up to life imprisonment for crypto-related crimes involving over 5 billion won ($3.6 million). Enforcement actions against virtual asset-related crimes are already increasing, with a 48.8% year-on-year rise in reported suspicious transactions in 2023 and a 90% increase in reports of suspected crypto-related crimes to law enforcement.
South Korea is implementing various measures to regulate its cryptocurrency market. This year, it has imposed stricter rules for token listings on local exchanges and announced plans to intensify scrutiny over exchanges and shut down those that fail to meet specifications recommended by the Financial Action Task Force. Crypto has also become a political subject in South Korea, with major parties promising to ease restrictions ahead of this year’s parliamentary elections. President Yoon Suk Yeol’s administration, upon taking office in 2022, postponed the implementation of a 20% tax on crypto capital gains, which was initially scheduled for 2023 to 2025, while putting more effort into collecting taxes on cryptocurrency.
South Korea’s crypto universe is both unique and fascinating.