Learn about South Korea's plans to elevate its temporary crypto crime investigative unit to a permanent department, reflecting increasing enforcement actions in the country's cryptocurrency market. With rising reports of suspicious transactions and suspected crypto-related crimes, South Korea is intensifying its efforts to regulate the sector, including implementing stricter rules for exchanges and delaying crypto capital gains taxes. As crypto becomes a political issue, the government aims to enhance regulatory measures to maintain market order.
South Korea is poised to establish a permanent crypto crime investigative department, upgrading its current temporary unit in response to a surge in enforcement actions within the cryptocurrency market. The Ministry of Justice and Ministry of Security and Public Administration are collaborating on this initiative, with discussions on budget allocation and prosecutor appointments scheduled for early next month.
The existing investigative unit, formed in July, comprises approximately 30 expert members and coordinates activities across seven government agencies, including the Prosecutor's Office, Financial Supervisory Service, and Financial Intelligence Unit. Elevating it to permanent status would facilitate enhanced coordination with domestic and international counterparts, especially in light of the forthcoming Virtual Asset User Protection Act, which imposes severe penalties for crypto-related crimes.
Enforcement actions against virtual asset-related offenses are already increasing in South Korea, with a significant rise in suspicious transactions reported in 2023. The government is implementing various measures to regulate the cryptocurrency market, including tightening rules for token listing on local exchanges and intensifying scrutiny over exchanges' compliance with Financial Action Task Force recommendations.
Cryptocurrency has become a significant political issue in South Korea, with major parties pledging to ease restrictions ahead of parliamentary elections. President Yoon Suk Yeol's administration has delayed the implementation of a crypto capital gains tax while focusing on improving tax collection from the crypto sector. The establishment of a permanent crypto crime investigation department underscores South Korea's commitment to maintaining market order and combating illicit activities in the cryptocurrency space.
(DEREK ANDERSEN, COINTELEGRAPH, 2024)