A recent report from local media indicates that the temporary unit responsible for investigating crypto-related crimes in South Korea is being developed into a permanent department. This decision comes as a result of a significant increase in enforcement activities within the country. The Ministry Departments of Justice, Security, and Public Administration are actively working towards promoting the unit to a department status with authoritative power.
According to the Republic of Korea paper, officials are expected to face challenges regarding fund allocation and the appointment of prosecutors in the near future. Currently, the prosecutors assigned to the unit are affiliated with the Seoul Southern District Prosecutor’s Office. As the unit is still in its trial phase, the government has the authority to dissolve it if desired.
Established in July, the investigation unit consists of approximately 30 members who handle cybercrime cases. Acting as a central hub, it collaborates with seven government bodies, including the Office of the Attorney General, the Financial Supervisory Service, the FIU, and the National Tax Service. Permanent departments in countries with implemented virtual asset laws benefit from amicable intergovernmental relations and can expect a consistent influx of cases once the Virtual Asset User Protection Act is enacted.
The punishment for crypto-related crimes exceeding 5 billion won (over $3.6 million) is life imprisonment under the law. Authorities are also tasked with tackling privacy-related cybercrimes, which are rapidly increasing. In 2023, the number of reported suspected financial crimes reached 16,076, marking a 48.8% increase from the previous year. Additionally, law enforcement agencies have seen a 90% rise in reported crypto-related crimes. South Korea employs various measures to regulate the cryptocurrency market, including stricter rules on tokens for local exchanges and the announcement of guidelines for exchanges. Those who fail to adhere to Financial Action Task Force recommendations may face seizure.
The involvement of crypto in the political landscape of Korea has created a contentious issue, as it represents a double-edged sword. The country’s major political parties have stated their intention to ease the restrictions that were imposed in previous election periods for this year’s parliamentary elections. When President Yoon Suk Yeol took office in 2022, he postponed the implementation of a 20% tax on crypto gains from 2023 to 2025. Subsequently, greater efforts will be made to ensure the proper collection of taxes on such assets.