In response to the increasing prevalence of cryptocurrency-related crimes and the need to protect investors, South Korea has taken significant steps to bolster its crypto regulation.
The country has established an interagency investigation unit dedicated to combating cryptocurrency crimes, while concurrently promoting the usage of Legal Entity Identifier (LEI) in the virtual asset market.
As reported on July 26, the Seoul Southern District Prosecutors Office has established the Joint Investigation Centre for Crypto Crimes, a collaboration of 30 investigators from seven government agencies, including the prosecution, Financial Supervisory Service, National Tax Service, and Korea Customs Service.
The unit’s primary objective is to investigate market players involved in issuing or distributing cryptocurrencies, identifying irregular trading activities, and probing associated criminal conduct.
It will expedite the investigative process for crypto-related criminal cases, covering detection, analysis, and handling.
The unit’s launch coincides with the passage of groundbreaking legislation at the South Korean National Assembly, aimed at safeguarding crypto investors.
The new law introduces penalties, including prison sentences and fines, for individuals engaged in unfair trading practices concerning virtual assets, manipulation of market prices, the utilization of undisclosed information, and illicit transactions.
In a separate development, the Korea Securities Depository has entered into a business agreement with Code, a company specializing in Travel Rules, to encourage the issuance and usage of LEI in the virtual asset market.
LEI is a standardized ID given to corporations worldwide participating in financial transactions, designed for efficient management of financial transaction information after the 2008 financial crisis.
The collaboration aims to support businesses in reporting and supervising due diligence with LEIs, ensuring transparency in the virtual asset market.