A recent report from local media suggests that the temporary investigative unit for crypto crimes in South Korea is undergoing development to become a permanent establishment. This comes in response to 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, granting it official power through a decree.
According to the Republic of Korea paper, officials are expected to face challenges related to funding allocation and the appointment of prosecutors in the near future. Currently, the prosecutors involved with the unit are affiliated with the Seoul Southern District Prosecutor’s Office. However, since the unit is still in its trial phase, the government has the authority to dissolve it if desired.
Established in July, the investigative unit consists of around 30 members who specialize in cybercrime cases. It serves as a central hub for seven government bodies, including the Office of the Attorney General, the Financial Supervisory Service, the Financial Intelligence Unit (FIU), and the National Tax Service. In jurisdictions where virtual asset laws have been implemented, permanent departments enjoy favorable relationships between government agencies. Additionally, they can expect a steady influx of cases once the Virtual Asset User Protection Act is enacted.
The punishment for crypto-related crimes exceeding 5 billion won (approximately $3.6 million) can result in life imprisonment under the law. The authorities are also responsible for addressing the increasing number of privacy-related cybercrimes. In 2023, the reported cases of suspected financial crimes reached 16,076, marking a 48.8% increase from the previous year. Furthermore, there has been a 90% rise in reported crypto-related crimes reported to law enforcement agencies. South Korea has implemented various measures to regulate the cryptocurrency market. This year, it has strengthened regulations on tokens for local exchanges and announced guidelines for exchanges, with the intention of seizing assets from those who fail to comply with the Financial Action Task Force recommendations.
The issue of crypto in Korea has become a politically charged topic, as it represents a double-edged sword. The country’s main political parties have announced plans to relax the restrictions that were previously imposed during the pre-election period for this year’s parliamentary elections. After taking office in 2022, the Yoon Suk Yeol government postponed the implementation of a 20% crypto gains tax until 2025. Moving forward, greater efforts will be made to ensure the proper collection of taxes on such assets.
