On Wednesday, July 26, the South Korean authority rolled out an interagency investigation department. The newly launched regulatory body will address crypto-related crime.
Additionally, the new unit aims at supporting the regulators to safeguard the investors from exploitative crypto activities.
South Korea Launches Interagency Investigation Unit
The new department was launched when the Korean Securities Depository entered into a partnership agreement with Code, a leading travel regulatory agency. The partnership aims to support the use of Legal Entity Identifiers (LEI) in the crypto sector. Also, the partners intended to support the distribution of LEI.
In an interview with a local news outlet, Yonhap News, the Seoul Southern District Prosecutors Office announced plans to establish Joint Investigation Centre for Crypto Crimes (JICCC) to support regulators in bringing down bad players in the crypto sector.
Addressing the interviewers, the prosecutor’s office explained that the new department will consist of 30 investigators from seven different regulatory bodies, including Financial Supervisory Service, Korea Customs Service, and National Tax Service.
Elsewhere a statement featured on FNNews from Lee Won-Seok, the prosecutor general, outlined the main aim of establishing the new alliance between different government bodies. The executive stated that the new department should support the virtual asset sector to grow and reduce potential risks.
Won-Seok highlighted that the primary goal of establishing the new regulatory agency was to monitor the activities of token issuers and exchanges. He added that the powers granted to the new alliance would support the regulators to identify individuals engaging in unlawful activities and prosecute them efficiently.
South Korea Adopts LEI to Tackle Crypto Crimes
In his statement, Won-Seok underscores the benefits of having the new JICCC. He believes that the regulators and investigators will leverage their vast experiences to expedite the investigation of crypto crimes. Also, Won-Seok mentioned that JICCC would support investigative processes such as covering detection, case analysis, and handling.
In a separate pronouncement captured on Decenter, a local media site, the Korea Securities Depository and CODE issued a joint report outlining the benefits of LEI. According to the report, LEI is a standardized identity given to key players in the global financial sector.
The LEI technology was first launched in 2008 after the global financial crisis that undermined the economic stability of most countries. Under the partnership agreement Code agreed to promote the use of LEI in the crypto asset industry.
The report demonstrated that the partners will implement measures to support businesses through LEI. Interestingly LEI has enormous potential to support businesses to uphold compliance by reporting and monitoring daily business activities. The LEI technology would be used by regulators, companies, and financial institutions.
South Korean Implement New Crypto Regulations
Moreover, the Korea Securities Depository and Code plan to leverage LEI technology to enable the public to meet the EU’s Transfer of Funds (TFR) regulatory requirement. The TFR are measures imposed by the European Union to prevent money laundering by restrictive illegal fund transfers.
Reflecting on the Decenter report, the Head of the Securities Settlement Division at the Korea Securities Depository, Koh,Chang-shop, confirmed that from December, the LEI technology would be implemented to replace the old Foreign Investment Registration Certificate (IRC). Chang-seop expressed optimism that LEI will improve transparency in the financial sector.
Notably, LEI and JICCC launching came when the South Korean authority sought to introduce laws to safeguard the investor’s interest in the crypto sector.
On June 30, the legislators in South Korea passed the Virtual Asset User Protection bill to address unfair crypto trading, such as market manipulation, susceptible transactions, and undisclosed information. The legislators agreed to impose hefty fines or imprisonment on the exchanges engaging in unlawful business practices. The punitive measures imposed by the South Korean lawmakers aimed to safeguard the investors in the crypto industry.
Additionally, the bill outlines the measure to protect the user from malicious attacks that might lead to the loss of substantial funds. A scrutiny of the bill illustrated the regulators would take legal actions against non-compliant firms or individuals.