South Korea Introduces Special Unit to Combat Illegal Crypto Activities

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South Korea has launched a special investigations unit to
combat the rising cases of criminal activities related to cryptocurrencies. The
multi-agency unit will reportedly protect the interests of the investors as the
country awaits proper regulations for the industry.</p><p>Dubbed the Joint
Investigation Centre for Crypto Crimes, the investigations unit is comprised of
professionals from the judicial, financial, and tax agencies, the South Korean Supreme Prosecutor’s Office mentioned in a statement seen by Reuters.</p><p>South Korea Regulates
Crypto</p><p>According to the statement, the cryptocurrency sector in South Korea is growing fast, and digital assets currently compare to other investment products like stocks. However, the sector lacks proper legal protection for investors and has inadequate regulations. Thus, the investigations unit is expected to fill the regulatory gaps until proper laws are passed.</p><p>Specifically, the new
investigations unit will reportedly examine <a href="https://www.financemagnates.com/terms/c/cryptocurrencies/">cryptocurrencies</a> with high price
fluctuations and pursue the delisting of suspicious projects from the digital
asset exchanges. Additionally, the unit will tackle illegal trading practices,
unauthorized foreign exchange transfers, and money laundering.</p><p>Recently, South Korea
has seen a rise in cases of illegal activities in the cryptocurrency sector. According to the Prosecutor's Office, the losses from cryptocurrency-related crimes increased by 118% for the total of five years ending in 2022 to 1 trillion won (USD $785 million). The crimes include illegal foreign exchange transactions,
price manipulations, and Ponzi schemes.</p><p>Rising Illegal Crypto
Activities</p><p>Among the cases of suspected illegal cryptocurrency
activity in South Korea is the collapse of the stablecoin project TerraUSD and
cryptocurrency Terra LUNA. The projects collapsed in 2022, wiping billions
of investors’ money and causing unprecedented market <a href="https://www.financemagnates.com/terms/v/volatility/">volatility</a>. The projects' Co-Founder, Do Kwon, is <a href="https://www.financemagnates.com/cryptocurrency/terraform-labs-do-kwon-sentenced-to-4-month-in-jail-over-document-forgery/" target="_blank" rel="follow">serving
a court sentence</a> in
Montenegro and faces charges in the US and South Korea. </p><p>According to the
statement, the cryptocurrency exchanges in South Korea reported an increase of
1,263% in suspected illegal crypto activities from 66 cases reported in 2021 to
900 cases in 2022. The cases were reported amid a decline of 66% in the
country’s crypto market capitalization.</p><p>Meanwhile, two weeks
ago, <a href="https://www.financemagnates.com/" target="_blank" rel="follow">Finance Magnates</a> reported that South Korea’s financial regulator had introduced new <a href="https://www.financemagnates.com/cryptocurrency/south-korean-companies-required-to-disclose-crypto-holdings-under-new-rules/" target="_blank" rel="follow">disclosure
requirements</a> for
companies holding cryptocurrencies. The regulations are part of the country's efforts
to regulate digital assets.</p><p>While
unveiling the new regulations, the Financial Services Commission (FSC) said
that companies are required to share information about the number of digital
assets they own, the nature of the assets, as well as information about
their business model.</p>

This article was written by Jared Kirui at www.financemagnates.com.