The nation’s worry over illegal activity in the cryptocurrency sector and want to protect investors were the driving forces behind the decision. According to a report on July 26, South Korea has created an interagency investigation team. This team is to combat cryptocurrency crimes. Which is in an effort to address the surge in illegal activity happening in the market as a whole and the looking into the need for investor safety.
In order to promote the issuing and application of LEI (Legal Entity Identifier) in the online asset market, the Korea Securities Depository simultaneously established a business partnership with Code, a Travel Rules firm with offices in Seoul.
The security laws in South Korea for regulations
The Joint Research Centre for Crypto Crimes will be established by the Seoul Southern District Prosecutors Office, based on a previous report by local news outlet Yonhap News. 30 detectives from various government departments and organizations, including the prosecutor’s office, the Financial Supervisory Service, the National Tax Service, and the Korea Customs Service, are part of the team.
According to sources, the unit’s main focus is on looking into market participants that issue or distribute cryptocurrencies in order to spot shady trading practices and look into related criminal activity. Additionally, it will hasten the identification, analysis, and handling stages of the investigation process for criminal cases including cryptography.
The launch is timed to the National Assembly’s adoption of South Korea’s pioneering legislation to protect cryptocurrency investors. For those who participate in unfair business practices involving virtual assets, the use of confidential information, exchange rate manipulation, and illegal transactions, the new law adds sanctions, including imprisonment and fines.
The LEI provided by Korea Securities Depository as well as Code is a standardized ID given to firms globally taking part in financial transactions, according to a local news story by Decenter. During the financial crisis of 2008, it was established for the effective administration of money transaction information.
According to the reports, the unit’s main emphasis is on looking into market participants that issue or distribute cryptocurrencies in order to spot any unusual trading activity and look into any related criminal activity. Additionally, it will hasten the identification, analysis, and handling stages of the investigation process for criminal cases including cryptography.
The launch takes place as the first-of-its-kind law in South Korea, intended to protect cryptocurrency investors, is approved by the National Assembly. For those who engage in unfair trading practices involving virtual assets, the use of confidential information, market price manipulation, and illegal transactions, the new law adds sanctions, including imprisonment and fines.
According to the Decenter research, the Code’s agreement encourages virtual asset operators to issue LEIs. They seek to assist organizations using LEIs in completing and tracking due diligence for interorganizational purposes as well as for financial companies and regulatory bodies. They also want to adhere to the Transfer of Funds Regulation of the EU.
According to reports, Koh Chang-seop, chief of the equities settlement department at the Korea Securities Depository, announced that the LEI will take ownership of the Foreign Investment Registration Certificate as of December 1 in order to increase openness.
Although there are both explicit and tacit regulations governing cryptocurrency as well as crypto asset providers in South Korea, there’s no clear bans on cryptocurrencies. Citizens of South Korea are permitted to hold cryptocurrencies and exchange on authorized exchanges.
Young people in South Korea favor investing in cryptocurrencies because they view them as a route to riches in an environment marked by chronically high unemployment.
The Commission for Financial Services regulates the crypto market in South Korea.
According to estimates, South Korea is home to the third-largest cryptocurrency market worldwide.
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