South Korean prosecutors are gearing up to launch a new joint crypto-crime investigation division in the coming spring. This move is aimed at bridging communication gaps with domestic agencies like the Financial Intelligence Unit (FIU) and other international bodies. The current ad-hoc unit will be transformed into a fully-fledged division, allowing for better coordination in handling crypto-related offenses.
A recent incident involving North Korea’s Lazarus Group, who allegedly laundered over $150,000 in stolen cryptocurrency through a Cambodian payments firm, has brought attention to the challenges of combating crypto-related crime in the Asia region. This state-sponsored hacker group reportedly generates more than 50% of its foreign currency through cybercrime, with cryptocurrency hacking alone contributing $3 billion to their coffers. It is evident that South Korea needs to ramp up its efforts against such highly sophisticated state-backed crypto criminals.
To address this growing concern, South Korea announced the development of a new law to protect crypto asset users from market manipulation, illegal trading, and information abuse. The Virtual Asset User Protection Act, passed by the National Assembly in July 2023 with a one-year grace period, imposes heavy fines and prison sentences for offenders. Offenders who profit more than $5 billion from crypto-related crimes could face life imprisonment.
As part of the preparations for the enforcement of the Virtual Asset User Protection Act, the Financial Services Commission (FSC) has finalized the preliminary legislative notice on the enforcement decree and supervisory regulations of the law. This initiative, along with the enactment of the new law, demonstrates South Korea’s commitment to beefing up its defenses and safeguarding crypto asset users from market manipulation and cybercrime.
It is crucial for South Korea to strengthen its capabilities in combating crypto-related crimes, especially in the face of advanced state-backed hacker groups like the Lazarus Group. The establishment of a dedicated crypto-crime investigation division is a step in the right direction to enhance coordination with domestic agencies and international bodies. This will enable more effective handling of crypto-related offenses and help prevent incidents like the recent money laundering case involving the Lazarus Group.
In conclusion, South Korea’s proactive measures in introducing the Virtual Asset User Protection Act and setting up a new joint crypto-crime investigation division signal a strong commitment to cracking down on crypto-related crimes. With the rise of sophisticated state-backed cybercriminals, it is essential for countries to stay ahead of the curve in combating such threats. By implementing stringent laws and enhancing coordination among agencies, South Korea is taking significant steps towards protecting its citizens and the integrity of the crypto market.
