South Korea to Upgrade Crypto Crime Unit Amid Rising Fraud Cases

Highlights:

• South Korea will create a permanent unit to fight cryptocurrency crimes as fraud and money laundering cases increase.
• The crypto crime unit has seized assets worth $97.5 million and arrested 18 suspects linked to illegal activities.
• Authorities plan to upgrade the unit by March 2025 to improve investigations and enforcement.

The South Korean government is going to set up a permanent unit to counter cryptocurrency crimes. According to authorities, there is an increase in crypto fraud, money laundering, and other criminal activities. In response, they want to beef up enforcement measures by adding to their specialized task force.

South Korea’s Crypto Crackdown Is Getting Serious

By early 2025, South Korea is turning its Joint Investigation Unit (JIU) into a full-scale crypto crime division, targeting fraud, price manipulation, and illicit trading.

This isn’t just regulatory posturing – they’ve already… pic.twitter.com/9h4oo1Kjsk

— Crypto Town Hall (@Crypto_TownHall) January 29, 2025

Authorities established the Virtual Asset Crimes JIU as a temporary team in early 2023. They created it in cooperation with financial bodies like the Financial Supervisory Service and the Financial Intelligence Unit. Other organizations, including the Korea Exchange and the National Tax Service, also contributed to its operations.

The unit has played an essential role in shutting down crypto-related crimes. It has investigated several cases of fraud and market manipulation over the past year. As the cases rise, officials now believe a permanent division is needed.

The ministry has now formally requested the upgrade of the unit to a permanent department of the prosecution service. Authorities expect the transition to occur by February or March 2025. The move comes as the government aims to regulate the cryptocurrency market and clamp down on financial crimes.

Impact of JIU’s Crackdown on Crypto Crimes

Since its launch, the JIU has advanced in fighting virtual asset crimes. Officials have indicted 41 people and arrested 18 for crypto crimes. Authorities have seized assets such as Bitcoin and luxury goods valued at 141 billion South Korean won ($97.5 million).

They have gone after criminals who practice fraud, market manipulation, and illicit financial transactions. A big scale investment scam that defrauded more than 15,000 investors was uncovered by authorities in 2024. It involved 28 different cryptocurrencies and caused 320 billion won ($228.4 million) in losses.

South Korean prosecutors have stepped up their efforts to strengthen the oversight of crypto exchanges. Earlier, officials ordered the suspension of Upbit, the biggest cryptocurrency exchange in the country. Officials reviewing its operations revealed between 500,000 and 700,000 cases of improper identity verification.

The government also plans to amend the Enforcement Decree of the Prosecutor’s Office Act. The revision will allow the JIU to operate as a full-fledged investigation unit. The new division will have additional resources, including more prosecutors and financial crime specialists.

They claim that these measures will enable the unit to solve complex crypto crimes. They highlight the need for a more structured response to fraudulent activities, as the number of fraudulent activities grows. Prosecutors will continue to work with regulatory agencies to check suspicious transactions and compel compliance.

Next Steps for the Investigation Unit

Public feedback on the revised enforcement ordinance has begun to be gathered by the Ministry of Justice. Officials have set February 5 as the deadline for submitting the opinions. Officials will then formally launch the unit once the review process is completed.

The government plans to finish the transition by March 2025. Additional support will be provided by prosecutors to investigate new and current crypto crime cases. They also will coordinate more closely between law enforcement agencies and financial regulators.

Authorities indicated that strengthening the JIU is a critical step to protect the digital asset market. After being upgraded, the division will continue to crack down on fraudulent schemes as well as money laundering activities.