South Korea is preparing to officially establish a specialized unit aimed at tackling crimes related to virtual assets, in response to the surge in cryptocurrency-related offenses. Initially created as a task force in mid-2023, the unit has grown in importance as authorities address the increasing cases of crypto fraud, money laundering, and other illicit activities. By early 2025, the government intends to transform the task force into a permanent department within the prosecution service to enhance its enforcement capabilities.
The new unit, named the Joint Investigation Unit (JIU), will focus on combating organized criminal groups involved in crypto manipulation, scams, hacking, and fraud. What started as a temporary task force in July 2023 will now be formalized as a permanent agency to address the growing threat of crypto-related crime.
In partnership with financial institutions like the Financial Supervisory Service, the Financial Intelligence Unit (FIU), and the Korea Exchange, the task force has been instrumental in tackling illegal activities within the cryptocurrency sector. Over the past year, it has charged 41 individuals, apprehended 18 suspects, and confiscated assets valued at around 141 billion South Korean won ($97.5 million), which includes Bitcoin, altcoins, and high-end goods.
The JIU will continue to work closely with various regulatory bodies, including the Financial Supervisory Service, the FIU, and other key agencies, such as the National Tax Service, the Korea Customs Service, and the Korea Deposit Insurance Corporation. These partnerships aim to enhance the unit’s ability to investigate and address the complex nature of cryptocurrency-related crimes, such as fraud, price manipulation, and money laundering. Additionally, the Korea Exchange will be part of the expanded unit, contributing its expertise in the financial sector.
With the official upgrade, the government intends to fine-tune its approach to tackling virtual asset crime. Public input on the revised enforcement ordinance will be solicited by February 5, after which the Ministry of Justice aims to finalize the launch of the unit by the end of March 2025. The new department will respond to the growing challenges of crypto crime.
Earlier this month, South Korea’s financial authorities ordered a suspension of Upbit, the country’s largest cryptocurrency exchange, after discovering issues with its Know Your Customer (KYC) procedures. During a review of the exchange’s license renewal application, authorities found between 500,000 and 700,000 instances of improper user identity verification.
