In its continuous attempt to regulate its evolving crypto scene and fight against crypto crimes, the South Korean government has offered support to virtual asset operators in the country. The nation’s Financial Intelligence Unit recently held a meeting with five local virtual asset services providers to help strengthen their “compliance capabilities.”
This meeting is a follow-up move by the South Korean authorities after the recent organization of an interagency investigation unit to combat crypto-related crimes.
Korea Finance Intelligence Unit Meets Virtual Asset Operators
On July 27, 2023, the Korea Finance Intelligence Unit (FIU) held an advisory meeting focused on bolstering the response to illegal activities related to virtual assets. This meeting primarily involved a group of five domestic virtual asset operators (Upbit, Bithumb, Coinone, Conit, and Gopax). Prosecutors from the newly-formed joint investigation unit for crypto crimes were also in attendance.
According to a press statement by the Financial Services Commission, the purpose of the meeting was to help strengthen the compliance capabilities of virtual asset operators in order to tackle virtual asset crimes.
In the meeting, Lee Yoon-soo, Director of the Korea Financial Intelligence Unit, mentioned the increasing need to protect investors and establish market transaction orders.
Director Lee stated that the FIU, through its Virtual Asset Strategy Analysis Team, will strengthen the evaluation of financial information related to crypto crimes and promptly report their findings to the appropriate law enforcement agencies.
Furthermore, he alluded to the important role of virtual asset service providers in fighting crypto-related crimes, while offering to build a good working relationship with them.
Director Lee said:
Since the role of virtual asset operators is very important as the primary gateway to prevent illegal acts, we plan to strengthen the legal compliance incentive system and improve the predictability of laws and systems to support operators in securing autonomous compliance capabilities.
The five attending virtual asset operators highlighted their company’s current framework and manpower in dealing with crypto crimes. Notably, Upbit, a prominent crypto exchange in South Korea, disclosed its use of artificial intelligence for fault transaction detection.
South Korea Launches Joint Investigation Unit To Clamp Down On Crypto Crimes
On Wednesday, July 26, the South Korean authorities launched a joint investigation unit to help tackle the rise of crypto crimes in the country.
This unit called the “Joint Investigation Centre for Crypto Crimes” consists of 30 investigators from seven government bodies, notably the prosecution, the Financial Supervisory Service, the National Tax Service, and Korea Customs Service.
The multi-agency unit, operating from the Seoul Southern District Prosecutors’ Office, will focus on investor protection. This is considered necessary as Korea’s crypto landscape continues to undergo a regulatory “evolution.”
The Prosecutor’s office said in a statement:
Virtual assets, which are traded over 3 trillion won (~$2.35 million) every day, with more than 6 million participants, are already investment products comparable to stocks, but the laws and systems are not complete, so market participants are practically left out from the protection of the law.
It also mentioned that investigations would specifically target crypto assets subject to high volatility and de-listing. Additionally, the investigation unit will crack down on criminal activities, such as illegal trading practices, tax evasion, unauthorized foreign exchange transfers, and money laundering.
Crypto Total Market Cap at $1.152 trillion | Source: daily TOTAL chart from TradingView